MICROCAPITAL BRIEF: International Finance Corporation (IFC) Loans $10m to Cambodia’s Microfinance Institution (MFI) Hattha Kaksekar for On-lending to Small, Medium-sized Rural Enterprise

The International Finance Corporation (IFC), a member of the US-based World Bank Group, recently announced that it will disburse a loan of USD 10 million to Hattha Kaksekar Limited (HKL), a microfinance institution (MFI) in Cambodia. The loan is expected to be used for on-lending to small and medium-sized enterprises (SMEs) that are involved in agriculture and other rural business activities. It is further anticipated that “extending these financial services through electronic and digital channels will also help IFC and HKL meet their objectives of lowering costs and improving reach.”

Adel Meer, the manager of IFC’s financial institution group operations that cover East Asia and the Pacific region, said that “by providing long-term funding to a leading microfinance institution in Cambodia, the IFC can help it scale up its operations and increase lending to micro, small, and medium businesses”[1]. Hout Ieng Tong, the president and CEO of Hattha Kaksekar, added that “the disbursement of IFC’s loan today will contribute to Cambodia’s macro-economic growth because it will be used to directly support Hattha Kaksekar’s micro and small business customers who work very hard to improve their lives and education”[1].

As of year-end 2014, HKL reported to the US-based non-profit Microfinance Information Exchange (MIX) total assets of USD 316.3 million, a gross loan portfolio of USD 250.1 million outstanding to approximately 100,000 active borrowers, USD 173.6 million in deposits from 168,000 depositors, return on assets of 3.27 percent and return on equity of 20.56 percent. As of June 2015, IFC reported total assets of 87.5 billion, a net annual income of USD 445 million and return on assets of 0.5 percent

By Victor Mugo, Research associate

About Hattha Kaksekar Limited (HKL)

Hattha Kaksekar Limited is a microfinance institution (MFI) based in Phnom Penh, Cambodia. It was founded in 1994 by two charitable organizations, the Canada-based Organisation Canadienne pour la Solidarité et le Développement (OCSD) and UK-based Oxfam International. It was transformed into an independent non-governmental organization (NGO) in 1996 and then into a private limited liability company in 2001. Its financial supporters have included Oikocredit, Norfund, Triple Jump, Agence Francaise de Developpement (AFD) and Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ). As of year-end 2014, HKL reported to the US-based non-profit Microfinance Information Exchange (MIX) total assets of USD 316.3 million, a gross loan portfolio of USD 250.1 million outstanding to approximately 100,000 active borrowers, USD 173.6 in deposits from approximately 168,000 depositors, return on assets of 3.27 percent and return on equity of 20.56 percent.

About International Finance Corporation (IFC) The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services, and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of June 2015, IFC has 184 member countries that drive its policies and approve disbursements. Also, As of June 2015, IFC reported total assets of USD 87.5 billion, a net annual income of USD 445 million and return on assets of 0.5 percent.

Sources and additional resources

[1] Shangai Daily: IFC lends 10 mln USD to Cambodian microfinance institution http://www.shanghaidaily.com/article/article_xinhua.aspx?id=293440

[2] International Finance Corporation (IFC) website http://ifcext.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/04915A460D370D4985257E88002A5F3F?OpenDocument

[3] MicroCapital Universe Profile: Hattha Kaksekar Limited (HKL) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Hattha+Kaksekar+Limited

[4] MicroCapital Universe Profile: The International Finance Corporation (IFC) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

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