Sathapana borrows $15m for micro loans
Sathapana borrows $15m for micro loans
Cambodian microfinance institution (MFI) Sathapana Limited will receive $15 million in loans to provide additional support to small- and medium- enterprises (SMEs), which make up the vast majority of the country’s businesses.
The loan comes courtesy of German Investment and Development Company DEG, a subsidiary of Germany development bank KfW.
Speaking during the signing ceremony at the Raffles Hotel le Royal in Phnom Penh yesterday, Sathapana CEO Bun Mony said the loan has to be paid back within seven years, at an interest rate of about 6 per cent.
The money helps Sathapana expand into the SME sector by providing long-term financing, with a maximum borrowing period of up to 48 months.
“This agreement also reflects that Sathapana’s reputation and image have been improving due to outstanding performance and effective operational management, meeting high international standards,” Mony said.
As of August 1, Sathapana registered outstanding loans of $143 million in the hands of 72,600 borrowers. The number of deposit customers, or those who use the MFI like a savings account, reached 54,334. Taken together, clients stowed away $70 million.
“Sathapana Limited plans to have 175,000 clients with a total loan portfolio of $500 million in the next five years. It hopes to reach out to 250,000 clients with a total loan portfolio of $1 billion in the next 10 years,” Mony said.
The MFI operates in all provinces and cities in Cambodia, has 101 offices and employs about 2,000 people.
KfW has been implementing financial assistance projects in Cambodia since the mid-1990s, according to the German Embassy in Phnom Penh.
Herbert Jaeger, senior investment manager of the DEG Representative Office in Bangkok, said DEG stepped into the business in Cambodia more than 10 years ago. Last year, DEG provided a $15 million loan to Cambodia’s largest MFI, PRASAC.
“DEG has [supported] the private sector in Cambodia with about $100 million and we will extend further,” he said yesterday, adding: “We will add our finances to other MFIs in the future.”
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