LOLC (Cambodia) Plc, a microfinance institution (MFI) controlled by LOLC International Private Limited of Singapore, recently announced the listing of Cambodia’s second-ever corporate bond on the Cambodia Securities Exchange (CSX). LOLC Cambodia raised a total of KHR 80 billion (USD 20 million) through the issuance of two types of bonds underwritten by Taiwan-based Yuanta Securities: (1) fixed-coupon bonds and (2) FX-indexed bonds whose coupon payment varies depending on the KHR-USD exchange rate, thus protecting investors from foreign-exchange (FX) risk. The bonds have interest rates 9 percent and 8 percent per year, respectively. The investors are reportedly “institutional investors, [primarily] foreign-owned banks.”
LOLC Cambodia was founded in 1994 as Thaneakea Phum (Cambodia) by US-based NGO Catholic Relief Services. It is now 97-percent owned by Singapore-based LOLC International and 3-percent owned by staff of the MFI.
As of 2018, LOLC Cambodia had USD 614 million in total assets, a gross loan portfolio of USD 487 million, deposits totaling USD 237 million, return on assets of 4.1 percent and return on equity of 27.6 percent. It also had 77 offices, 236,000 borrowers and 30-day portfolio-at-risk ratio of 0.96 percent. Its deposit rates range from 5 percent to 9 percent per year.
LOLC International offers microfinance services through subsidiaries including LOLC Cambodia, Cambodia-based Prasac Microfinance Institution and Indonesia-based PT Sarana Sumut Ventura. LOLC International Private Limited is a subsidiary of Sri Lanka-based Lanka Orix Leasing Company, which in turn is a member of the Japanese conglomerate Orix.
By Jolene Khor, Research Associate
Sources and Additional Resources
The Phnom Penh Post news article: “Second Corporate Bond by LOLC Listed on CSX”
https://www.phnompenhpost.com/business/second-corporate-bond-lolc-listed-csx
LOLC Cambodia homepage
http://www.lolc.com.kh
Catholic Relief Services homepage
http://www.crs.org/
MIX Market profile on LOLC Cambodia
https://www.themix.org/mixmarket/profiles/lolc-0
Bloomberg profile on LOLC International Private Limited
https://www.bloomberg.com/research//stocks/private/snapshot.asp?privcapId=423711291
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