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PRASAC gets $150 million bank credit

Sok Chan / Khmer Times Share:
KB Kookmin Bank’s head office in South Korea. Supplied

Cambodian Securities Exchange (CSX)-listed PRASAC Microfinance Institution Plc received $150 million in credit facilities from South Korea’s KB Kookmin Bank to strengthen its capital base, liquidity and expand its lending.

Despite the severe impact on the business environment caused by the COVID-19 pandemic, PRASAC, one of the largest financial institutions in Cambodia, has taken further steps to secure its financial stability by successfully receiving a seven-year subordinated loan of  $50 million and a three-year committed credit facility of $100 million from Kookmin Bank, one of the leading commercial banks in South Korea and a new shareholder of PRASAC Microfinance Institution Plc since April 2020.

Chang Su Choi, head of the global business group of KB, which has one branch in Cambodia in Phnom Penh, said that KB is pleased to be working with PRASAC on this facility so that it can be channelled to micro, small and medium enterprises (MSMEs) in Cambodia. “This move seeks to generate economy recovery and growth and employment amid this unprecedented situation,” said Su Choi.

Say Sony, PRASAC’s executive vice-president, said that these funds are a part of building up a strong capital base and liquidity to support its business needs as well as to enable PRASAC to extend more loans to micro, small and medium businesses which are mostly owned by women to sustain their business operations and support their economic activities.

“Despite this time of uncertainty, PRASAC has been able to garner trust from KB through these credit facilities. This shows the unshaken confidence in PRASAC and Cambodia’s financial sector as a whole and outlook for the country’s sustained economic recovery,” Sony said.

By the end of June, PRASAC had about 2,000 SME clients with outstanding loans totalling $126 million. PRASAC’s strong performance was demonstrated by its gross loans and deposits from customers which reached $2.659 billion and $1.928 billion, respectively. PRASAC’s total assets also increased more than $3.390 billion by the end of June.

PRASAC remained the market leader in terms of total assets, gross loans, deposits from customers, and net profit. Through an extensive branch network of 180 outlets and 138 ATMs across the country, PRASAC offers a variety of financial products and services accessible to rural communities and micro-enterprises.

On May 5, PRASAC listed on the CSX, raising 127.2 billion riel ($31.8 million) from just three investors – Malaysia’s Hong Leong Bank, Prudential Insurance and Shinhan Bank. All bonds are fully guaranteed by the Asian Development Bank’s trust fund’s Credit Guarantee and Investment Facility (CGIF).

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