Logo of Phnom Penh Post newspaper Phnom Penh Post - Upbeat OPIC eyes Kingdom firms for future investment

Upbeat OPIC eyes Kingdom firms for future investment

A motorcycle passes in front of an Acleda bank branch in Phnom Penh.
A motorcycle passes in front of an Acleda bank branch in Phnom Penh. Hong Menea

Upbeat OPIC eyes Kingdom firms for future investment

The Overseas Private Investment Corporation (OPIC) is “optimistic” about its recent investments in Cambodia’s financial sector, a representative said yesterday, adding that the US government’s development finance agency hopes to eventually direct some of its lending facilities to local SMEs.

Geoffrey Tan, Asia-Pacific regional representative of OPIC, told an AmCham breakfast briefing that OPIC has earmarked $4 billion in finance capital for Asia, though its existing investments in Southeast Asia remain low by comparison to those in Africa and Latin America. He said the loan facilities that the agency provides help to provide economic growth and “long-term stability structure”.

“If our investments don’t work, the developmental effects we want to see won’t happen,” he said.

He added, however, that OPIC had a solid track record and very few of its investments had ever failed.

Founded in 1971, OPIC is a US government agency “that helps American businesses invest in emerging markets”. The agency provides loans – no smaller than $500,000, and usually calculated in the millions – to well-estaalished private sector companies in these markets.

Since 2013, OPIC has committed over $200 million in finance to six companies in Cambodia, mostly financial institutions, according to data on its website.

Among the recent investments is a $5 million long-term loan facility to local microfinance institution (MFI) Thanakea Phum (Cambodia) Ltd aimed at supporting the disbursement of home improvement loans to low-income Cambodians.

The MFI, majority owned by a fund managed by US-based DWM Asset Management, has since become one of OPIC’s most successful investments in the region, according to Tan.

Meanwhile, he said that he was “optimistic” about OPIC’s investments in Cambodia, especially its cooperation with the Kingdom’s biggest financial institution, Acleda Bank.

OPIC announced last year that it would provide $125 million over seven years to Acleda Bank to support lending to small and medium enterprises (SMEs).

It has also provided $30 million to the bank as part of a joint initiative by Goldman Sachs and the International Finance Corporation (IFC) to support local women entrepreneurs.

While OPIC announced in 2015 that it was interested in supporting Cambodian SMEs directly, Tan said the transition to SME finance would need more time.

“We’re not well-suited to back small start-ups or commercial activity,” Tan said. “It’s quite restrictive. We would like to see this shift.”

MOST VIEWED

  • Sihanoukville building collapse death toll rises to 19

    Minister of Interior Sar Kheng said on Sunday that the government will act against those responsible for the collapse of a seven-storey building in Sihanoukville on Saturday, which resulted in 19 dead and 24 injured as of Sunday evening. Sar Kheng said three Chinese nationals and one

  • Gov’t to probe Chinese exports to US via Sihanoukville

    The government is investigating allegations that Chinese companies are using Chinese-owned special economic zones in Cambodia to export goods to the US and avoid tariffs, said Ministry of Commerce spokesman Seang Thay. The move comes after US embassy spokesman Arend Zwartjes said the US had

  • Banh: The Khmer Rouge worse than sanctions and pressure

    Minister of National Defence Tea Banh said on Thursday that having sanctions and external pressure placed on Cambodia was not worse than life under the brutal Khmer Rouge regime. Tea Banh, who is also deputy prime minister, was speaking to military and ruling party officials

  • Funcinpec ‘set to sell their headquarters’, says source

    An anonymous source from Funcinpec said acting president Prince Norodom Chakravuth had held a meeting with other officials to discuss selling several of the party headquarters across the country while the party president Prince Norodom Ranariddh receives medical treatment at the Royal Phnom Penh Hospital