Dutch development bank FMO has proposed a $20 million funding in Sathapana Bank, one of Cambodia’s leading banks in terms of the loan portfolio, according to a disclosure.
Established in 1995, Sathapana Bank has developed from a micro-financial institution (MFI) into a bank. It is now ranked 4th in terms of the loan portfolio and 7th in terms of deposits.
Sathapana has a branch network of over 170 throughout the country. Through these branches, it provides access to finance to individuals, small and medium-sized enterprises and corporate customers.
The proposed loan will be used to support Sathapana in its growth ambition and its focus on MSMEs. Further, the funds will improve its stable funding and interest rate profile.
“With this transaction, FMO supports a financially solid and reputable client and one of the top banks in the country, to strengthen its balance sheet and reach out to the MSME sector in Cambodia. This investment is aligned with our strategy to invest in the least Developed Countries (reducing inequalities), specifically targeting SMEs,” the lender disclosed.
This will be FMO’s third funding to Sathapana Bank to date. In 2019, the Dutch lender proposed a $16.5 million investment into the Cambodian bank. Earlier, FMO also proposed a $15 million investment into Sathapana.
FMO was founded in 1970 and is a public-private partnership, with 51% of its shares held by the Dutch state and 49% by commercial banks, trade unions, and other members of the private sector.
In Cambodia, FMO last year proposed a $4 million funding in Cambodia’s Maxima Microfinance that offers group, individual, and small business loans.
It was also considering another $1.4 million commitment to Emerging Markets Investment Advisers’ (EMIA) second fund to help the latter support its portfolio in the face of COVID-19.
FMO said the increased commitment aimed to replenish the Cambodia-Laos-Myanmar Development Fund II’s (CLMDF II) follow-on reserves “fully earmarked to support existing portfolio companies.”