The International Finance Corporation (IFC), a member of the World Bank Group, has proposed a three-year senior financing package to Angkor Mikroheranhvatho (Kampuchea) Co, also known as AMK, a registered microfinance institution based in Phnom Penh, Cambodia.
In a disclosure, IFC said the financing package consists of an anchor investment of up to $10 million in the first Khmer Riel (KHR)-denominated $30-million social bond to be issued by AMK Microfinance Institute and an up to $5 million senior loan to AMK.
“IFC’s financing to AMK is targeted for on-lending to women borrowers, farmers, women-led VSEs (very small enterprises), and SMEs,” the international lender said.
AMK, the largest provider of credit in Cambodia with over 280,000 active borrowers, originated from the credit and savings program of Concern Worldwide in Cambodia in the 1990s. It became a standalone microfinance institution in 2003 and obtained a deposit-taking license in 2010.
Its main operation is in the rural areas of Cambodia with diversified product offerings, including group and individual loans, deposit, money transfers, micro-insurance, payment, and other e-banking products and services.
IFC said in its disclosure that AMK serves clients in 12,614 villages in all 25 provinces in Cambodia. The firm’s main shareholders are Shanghai Commercial and Savings Bank, Agora Microfinance, and AMK Staff Association.
The financing package is expected to improve access to KHR-denominated finance for micro, women, and farmer borrowers, improve access to finance for MSMEs and women-owned/led MSMEs, and improve the quality of financial services for individuals and MSMEs, the IFC added.
“The proposed project will provide AMK with the needed medium-term financing in KHR, which is scarce in Cambodia, help bring in investors with IFC’s vote of confidence as the anchor investor, and share IFC’s experience and knowledge in AMK’s first social bond issuance,” the lender added.
Cambodia’s $8-billion microfinance industry is touted by foreign investors as bringing financial opportunities to the country’s poor. According to a Nikkei Asian Review report last year, the sector continues to grow, expanding by about 30 per cent in 2018. In 2017, Cambodia’s largest microcredit institutions made more than $130 million profit.