Logo of Phnom Penh Post newspaper Phnom Penh Post - Thai firm banks on Cambodia



Thai firm banks on Cambodia

Workers line up new bikes for sale in Phnom Penh
Workers line up new bikes for sale in Phnom Penh. Hong Menea

Thai firm banks on Cambodia

Group Lease, a Thailand-based motorcycle leasing firm, has credited its recent economic turnaround partly to “aggressive expansion” in Cambodia, and expects profits from the Kingdom to eventually take over those in Thailand.

“The Cambodian market offers high profit margins against very low provisions for non-performing loans,” GL’s CEO Mitsuji Konoshita said in a press release.

“And because we are starting from a small base, the market there carries enormous growth potentials.”

As earnings suffered due to Thailand’s politically-connected economic turmoil in the first half of 2014, GL says it has its Cambodian branch GL Finance and Thailand’s recent economic recovery to thank for high profits.

Of the last 93.76 million baht ($2,877,600) net profit in 2014’s fourth quarter, the company said 22 per cent – or 21.09 million baht ($647,461) – came largely from GL Finance.

GL Finance has now set up 153 points of sales across Cambodia to provide loans for Honda motorcycles and farming machinery.

About 2,000 vehicles are sold under GL Finance leases in Cambodia per month, according to the company, with sales slated to increase to 3,000 in March and 5,000 by the end of 2015.

That sets the Cambodian operation close to GL’s home base of Thailand, which deals about five to 6,000 bikes a month.

With profit margins substantially higher in Cambodia and a less crowded market than Thailand, GL says that “aggregate profits” from Cambodia are projected to surpass Thailand next year.

Nevertheless, most Cambodians still prefer to buy motos outright or purchase them by borrowing from friends or family.

A representative for Honda Mean Leap, a moto dealer in Phnom Penh which has a contract with GL Finance, said that most Cambodians “are still buying [motos] with their own money”.

“We only sell 10 to 15 motos on loan per month, but [it is becoming] more popular with Cambodians.”

Sin Senacheert, CEO of microfinance institution Prasac, said Cambodians who bought motorcycles on loan were mostly in urban areas.

While Prasac does provide motorcycle loans, Senacheert said they were not intended simply for personal use.

“We would not like to increase loans in that segment because it’s not for a productive purpose,” he said.

MOST VIEWED

  • ‘Education’ a priority traffic-law penalty

    A top National Police official on June 21 neither rejected nor confirmed the authenticity of a leaked audio message, which has gone viral on social media, on a waiver of fines for a number of road traffic-related offences. General Him Yan, deputy National Police chief in

  • Pursat Ford assembly plant opens

    The Kingdom’s first Ford assembly plant was inaugurated on June 16 in Pursat province amid rising demand for brand-new vehicles among Cambodians. The facility is seen as a game changer for the domestic automobile industry, which could bring a wave of investors seeking to cash

  • Siem Reap’s $18M zoo said to educate public, help wildlife

    Angkor Wildlife and Aquarium Co Ltd has invested $18 million in a zoo in Siem Reap province, which will be opened in October to educate and promote animal conservation as well as attract national and international tourists. Currently, the Angkor Wildlife and Aquarium is building the

  • Volunteer scheme to foster ‘virtuous’ humanitarian spirit

    A senior education official said volunteer work contributes to solidarity and promotes a virtuous humanitarian spirit among the youth and communities. Serei Chumneas, undersecretary of state at the Ministry of Education, Youth and Sport, made the comment during the opening of a training programme called “

  • Angkor photo rules clarified

    The Apsara National Authority (ANA) denied that it had banned the use of camera tripods in the Angkor Archaeological Park, explaining that the confusion stemmed from a long-standing rule which required commercial photographers and videographers to apply for permission to film. The explanation followed a

  • $50B infrastructure plan en route

    The government’s upcoming $50 billion,10-year infrastructure master plan will provide tremendous investment opportunities for domestic and foreign entities, transport experts and economists say. Minister of Public Works and Transport Sun Chanthol revealed the plan to Japanese ambassador to Cambodia Masahiro Mikami on June 15. At