Instalment payments for goods gaining purchase

Instalment payments for goods gaining purchase

AEON Microfinance (Cambodia) Co, part of Japan-based AEON Group, said sales by instalment for electrical appliances and motorbikes increased by 715 per cent in the first quarter of 2013 year on year, a trend industry experts say will grow further with increasing demand for electronics.

 

Started in December 2011, loan disbursement reached $2.5 million with 5,000 new customers in the first quarter of this year, compared to $343,000 in the same period of 2012, managing director Daisuke Maeda told the Post yesterday.

“Smartphones and PCs are the most popular, followed by motorbikes,” he said.

AEON Microfinance (Cambodia) offers an instalment service, or hire purchase, which is different from loans directly given in cash to the customer.

Currently AEON Microfinance is one of the very few players providing this new type of product in Cambodia’s crowded MFI market.

“We expect more competitors come on this year and it will be good for consumers that finance institutions try to provide better services by such competition,” Daisuke Maeda said.

Industry insiders said they welcomed the increase.

Bun Mony, the president of the Cambodia Microfinance Association (CMA) and chairman of MFI Sathapana Ltd said the growth in instalment services “reflects that it is favourable in the market”, adding that it supports people’s needs when it comes to purchasing technology.

He said growing customer demand will lead to an increase of these products, either through current MFIs diversifying their products or through new MFIs with only this focus entering the market.

According to Taing Sothearith, marketing manager at Sunsimexco, an authorised dealer for brands including Sony, AKIRA and Panasonic which co-operates with AEON Microfinance, instalment services for electronics have been growing since they began in 2011.

“Most of the customers, they want to do business and they want to buy their things. For their house, for their business, they want to spend money,” he said.

Earlier this month, the Post reported that the loan portfolios of the 35 registered MFIs and four NGOs that are members of the CMA reached $1 billion at the end of March, a 41 per cent increase from the same period last year.

Recent figures from the CMA showed that deposits made at seven microfinance institutions that are licensed to take deposits reached $346 million, a 145 per cent increase over the past 12 months.

The total loan portfolio of AEON Microfinance (Cambodia) at the end of the first quarter this year was about $4 million, with 6,500 customers, Daisuke Maeda said.

The MFI is part the AEON Group, which is building a 68,000 square metre shopping mall in Phnom Penh at a cost of $205 million.

phnompenh post