MICROCAPITAL BRIEF: Mobile Banking Technology, ATMs “An Emerging Trend” Among Microfinance Institutions (MFIs) in Cambodia

As competition in the microfinance industry of Cambodia increases, microfinance institutions (MFIs) are investing in technological upgrades to keep up with the market. Sean Thornnin, a lecturer in economics at Limkokwing University in Cambodia, reportedly referred to the movement as “an emerging trend,” commenting that “leading players need to consider more investment in banking technologies to maintain their position. Otherwise, they may lose out.” Technologies such as automated teller machines (ATMs) and mobile banking services that allow customers to make payments, deposits and money transfers by phone are increasingly being offered.

An example is the Cambodian MFI Prasac, which began an offering services via ATM in September 2011. According to the US-based nonprofit Microfinance Information Exchange (MIX), Prasac’s total deposits increased from USD 6 million in December 2011 to USD 34 million in September 2012, while the number of depositors increased from 8,050 to 99,300. As of December 2011, Prasac reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 157 million, return on assets (ROA) of 6.36 percent and return on equity (ROE) of 28.16 percent. As of September 2012, the institution reported a gross loan portfolio (GLP) of USD 195 million and 130,000 active borrowers.

In Channy, the president and CEO of ACLEDA Bank Plc, a Cambodia-based retail bank, reportedly said, “We realize Cambodian MFIs are developing human resources and infrastructure. It’s definitely a strong message for banks to avoid standing still in the same place.” “More competition is good, because clients will get high-quality products and services from suppliers.”

By Nicole Boyd, Research Associate

About Prasac
Prasac was founded as a credit component of an agriculture support program funded by the European Union and implemented by the Royal Government of Cambodia. It was registered in 2004 with the Ministry of Commerce as a private limited liability company and is licensed by the National Bank of Cambodia (NBC) to legally offer financial services. As of December 2011, Prasac reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 157 million, return on assets (ROA) of 6.36 percent and return on equity (ROE) of 28.16 percent. As of September 2012, Prasac reported a gross loan portfolio (GLP) of USD 195 million, 130,000 active borrowers, 99,300 depositors and USD 34 million in deposits.

About ACLEDA Bank
ACLEDA Bank is a public limited company based in Cambodia. It was originally founded in January 1993 as The Association of Cambodian Local Economic Development Agencies (ACLEDA), a non-governmental organization aiming to raise the standards of living of poor people by promoting economic activities ranging from self-employment to medium-sized business. It was licensed by the National Bank of Cambodia as a “specialized bank” in October 2000 and as a “commercial bank” in December 2003, when it was renamed ACLEDA Bank. It provides a range of banking services including deposits, loans, cash management and trade services. ACLEDA also works in Laos through is subsidiary, ACLEDA Laos. As of December 2011, ACLEDA reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 1.5 billion, return on assets (ROA) of 3.73 percent and return on equity (ROE) of 32.03 percent. As of September 2012, the bank reported a gross loan portfolio (GLP) of USD 1.2 billion, 306,000 active borrowers, 918,000 depositors and deposits of USD 1.4 billion.

Sources and Additional Resources:

Phnom Penh Post. “Local MFIs’ high-tech investment,” http://www.phnompenhpost.com/2013022661599/Business/local-mfis-high-tech-investment.html

MicroCapital. February 22, 2013, “MICROCAPITAL BRIEF: Microloans up 38%, Microdeposits Up 144% in Cambodia,” https://www.microcapital.org/microcapital-brief-microloans-up-38-microdeposits-up-144-in-cambodia/

MicroCapital. January 8, 2013, “MICROCAPITAL BRIEF: ACLEDA Bank of Cambodia Borrows $40m From IFC Capitalization Fund,” https://www.microcapital.org/microcapital-brief-acleda-bank-of-cambodia-borrows-40m-from-ifc-capitalization-fund/

MicroCapital. October 21, 2012, “MICROCAPITAL BRIEF: responsibility Social Investments Loans $8m to Prasac of Cambodia, $1m to ASKI of the Philippines,” https://www.microcapital.org/microcapital-brief-responsability-social-investments-loans-8m-to-prasac-of-cambodia-1m-to-aski-of-the-philippines/

MicroCapital Universe Profile: Prasac https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Prasac

MicroCapital Universe Profile: ACLEDA Bank https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACLEDA+Bank

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