Amret Microfinance is one of the oldest lenders in Cambodia, opening their doors in 1991, and is currently the third largest microfinance operator in the country.
They are unique in that the majority of their shareholders are international financial institutions, which gives them a number of advantages over smaller, home-grown microfinance lenders.
Deputy Chief Executive Officer Dos Dinn explains: “Currently we have five shareholders, and three of them are major shareholders.”
He goes on, “The main one is the Advans Group, who are incorporated in Luxembourg and they operate microfinance in Africa and Asia and they’re a world-class shareholder, and they hold up to 53 per cent, and the other two are IFC, a member of the World Bank Group, and FMO, the entrepreneurial development bank of The Netherlands, which each hold up to 20 per cent of the shares.
Dos Dinn says that the most important advantage brought by the international investors is knowledge. “Advans do not operate only in Cambodia, but in many other countries, so the first thing is knowledge sharing and transferring, so they know what works and what doesn’t work, so they can transfer that and share with us.
Technology is becoming an increasingly important part of the credit industry in Cambodia, which Dos Dinn acknowledges. “Technology is important, so we’re currently working on mobile banking, and they have similar projects in other countries, so they bring experts and help us to run the project, so this is kind of a good thing that they bring to us.”
The international investors bring a level of trust and cachet to Amret. “Having international shareholders also helps us to increase our name and our image in the international market, so it helps us with access to funding because international lenders trust the group.”
And Amret’s business is growing impressively. As Dos Dinn explains, the scale of the business is growing at startling rates. “Up to now we have about 340,000 credit clients and about 200,000 depositors. In 2015 we lent around $460 million. And this year we plan another $640 million in loan disbursements to around 380,000 clients. So that’s about 40 per cent growth this year.”
These long-term loans will enable Amret to help raise incomes, expand businesses, and create jobs throughout the country.
As Dos Dinn notes, most of their business is done with micro and small and medium enterprises. “We mostly offer loans for business activities but also for consumption like home improvements, but that’s small; the major part of our loan portfolio is on the business side.”
The executive says in the 20 years he has been in the industry, the business has changed a lot, but it is still not entirely motivated by the hunt for profits. “The market now is quite tough, and competition is increasing very much, so to target high growth is not really a good thing.”
Dos Dinn says the company’s plans could involve some big changes in the future. “We’re looking at offering more services like transfers and bill payments. Its part of our plan as well, we are trying to assess it, but the idea is to transform into a commercial bank.”