Amret Microfinance Institution, a local microfinance organisation, will receive $40 million in loans from IFC, the lending arm of the World Bank that caters to the private sector.
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The loan, which has been approved in principle, will be used by the Cambodian MFI to expand its financial services to small and medium-sized enterprises in the kingdom, a company representative said.
“This is the second time we have received a loan from IFC. In 2016, Amret got $50 million,” said Chea Phallarin, CEO of Amret, the second largest deposit-taking MFI in Cambodia.
“The loan will be mainly used to provide credit to SMEs in Cambodia,” he said, adding that demand for this service is high and that their lowest interest rate will be 1.1 percent.
“With a wide network of branches in all 25 provinces across the country, we will continue our outreach to agricultural enterprises and SMEs, providing them with reasonable and competitive financial products and services,” Mr Phallarin said.
20 percent of Amret’s total outstanding loans are in the SME sector, Mr Phallarin explained.
In 2015, IFC became a shareholder in Amret, buying 19.9 percent of shares in the company. IFC also provides technical advice in risk management and corporate governance to the Cambodian MFI.
The deposit portfolio in the local MFI sector grew by about 35.6 percent last year, reaching $2 billion and 1.7 million customers, according to NBC.