The National Bank of Cambodia (NBC) has revoked the licenses of 11 microfinance institutions operating outside the capital, arguing they have failed to abide by the law and the regulations set by the central banking authority.
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In a press release issued yesterday, the NBC said suspending the licences will set an example for other MFIs to operate in accordance with the law and compete fairly.
Chea Phallarin, the CEO of Amret Microfinance Institution, said the move will cause players in the industry to think twice before engaging in dubious activities that goes against NBC regulations.
“There are many MFIs, some follow the rules, while others don’t,” he said. “This serves as a warning for those that are not behaving ethically.”
The Cambodia Microfinance Association has 45 members, including 39 licensed microfinance institutions and six rural credit operators.
The association’s loan portfolio stands at $2,028.56 billion with 1,779,171 different accounts.