Countries & Regions

Through the global financial crisis, Cambodian MFIs survived and grew, albeit at a slower pace than years past. There has been a growing concern of multiple borrowings in the market, but the recent launch of a central credit registry is aimed to strengthen the credit reporting system and to enhance the credit assessments of borrower. Detailed analysis of credit registry cost and its impact on profitability of MFIs can be found under the Quarterly Update tab.

• Overview: Cambodia is ranked as one of the world’s best microfinance environments, enabled by its economic growth, strong regulatory regime and limited outreach of commercial banks.
• Supply & Demand: The market has witnessed a steady growth in GLP, borrowers, deposits and depositors. There are concerns being raised that this growth is masking multiple borrowings in the sector, but the newly launched Credit Bureau is likely to help the sector deal with this. Growth in clients has been driven by the diversity of products offered by MFIs, including microinsurance, money transfers and remittances.
• Funding: The major of funding in Cambodia comes from foreign sources and foreign investors own the majority of equity shares in MFIs. As a result of the global financial crisis though, foreign capital inflows have declined and MFIs have turned to deposits to cover the difference.
• Performance:  Cambodia’s higher risk rating has led to the increase in the borrowings rate and MFIs in turn have passed this on to borrowers in terms of higher loan rates, which has resulted in higher PAR.
• Quarterly Update: In MIX’s quarterly barometer survey, MFIs reported expectations for moderate growth rates into the near future and for consistently low risk rates. Interestingly though, funding has become a significant concern for MFIs in maintaining borrower and loan portfolio levels.

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