Yannick Milev of Cambodia’s Chamroeun Microfinance presented today at European Microfinance Week on the lender’s expansion into providing loans as large as USD 250,000 to private companies that supply piped water to households in Cambodia. In rural parts of the country, the government issues monopolies to private water providers to serve given areas. Approximately 400 companies are licensed to receive these monopolies.
In designing the loan product, Chamroeun employed a technical assistance grant of USD 20,000 from Aqua for All. Oikocredit is considering investing USD 1 million in the effort, with approximately USD 200,000 from Aqua for All available if needed to cover the first 75 percent of loans that exceed 90 days in arrears. The project is planned as a pilot with a volume USD 2 million over two years and primary loans of USD 50,000 to USD 250,000. Borrowers also can access follow-on loans of 10 percent of the original loan – with a cap of USD 10,000 – to be deployed within hours to address accidental breakage of pipes, which is common during road construction.
Potential future add-ons include funding for water testing equipment or for households to pay the fee (which starts at USD 80) to connect to the shared pipe.
Chamroeun has ongoing experience funding household water filters for which customers can borrow as an add-on to business loans. Eighty percent of borrowers choose to do so, and Chamroeun has USD 1.5 million in water-filter loans outstanding to 3,200 clients.
This feature is part of a sponsored series on European Microfinance Week, which is taking place in Luxembourg and online through November 18. MicroCapital has been engaged to report on the conference each year since 2012.
Additional Resources
European Microfinance Week 2022
https://emw2022.eu/
European Microfinance Award
https://www.european-microfinance-award.com
MicroCapital coverage of European Microfinance Week since 2012, including the European Microfinance Award
https://www.microcapital.org/category/european-microfinance-week/
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