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Sathapana Shifts from MFI to Commercial Bank

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A graphic artist’s depiction of the first Sathapana commercial bank. The company officially made the switch from microfinance insitute to commercial bank Friday. Supplied

Sathapana Microfinance Plc., the third largest MFI in Cambodia, has officially transformed itself into a commercial bank with total capital of $120 million, a move in line with Japanese-owned Maruhan Japan Bank acquiring a 95.1 percent stake in 2012.
 
Sathapana president and CEO Bun Mony said becoming a commercial bank would provide more options to customers and help reduce poverty.  
 
“Sathapana’s first capital was $18 million when we registered as an MFI with the NBC [National Bank of Cambodia]. But becoming a commercial bank, we have increased our capital to $120 million,” Mr. Mony said. “Maruhan Bank injected $74 million in the commercial bank and now put additional $30 million of capital in the consolidation with Sathapana to transform it into a commercial bank.
 
“Our market share is from 13 to 15 percent and about 130,000 customers use loans from us. Although Sathapana has become a bank, the focus will remain on loans to SMEs as well as giving more products to existing and new customers.”
 
Maruhan Group chairman Chang-Woo Han said working with Sathapana capitalized on the strengths of each institution. “Consequently, we will use the strong points from both side to become a solid commercial bank,” he said.
 
“I am interested in investing with Sathapana because the institution has more experience in providing loans in rural areas that helps the economy. The Cambodian economy is seeing rapid growth year on year.”
 
Central bank governor Chea Chanto said the official launch of Sathapana Bank showed the effort shareholders, management and staff had put into n strengthening and diversifying its operations. “Sathapana Bank Plc will commence its operation with more capital than expected and that will help improve the bank in providing fast, convenient service, diversifying financial products and increase its capacity and the confidence of the public in the banking sector,” Mr. Chanto said.
 
“The banking sector is taking an active part in boosting the financial sector to increase business effectiveness, create more jobs and reduce the income gap and poverty.  A recent report stated that 51 percent of mature people in Cambodia received official financial services, compared to 8.7 percent 10 years ago,” he said.
 
Sathapana started as an NGO in 1995 and was licensed as an MFI in 2003. By the end of last year, it had more than 127,000 customers with outstanding loans of $472 million and total deposits of $260 million and has 160 branches.
 
As of the end of the first half of last year, there were 36 commercial banks in Cambodia, 11 specialized banks, eight bank representative offices, 49 microfinance institutions, 42 rural credit operators and eight financial leasing firms.

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