Microfinance Sector Performance
Microfinance operation in Cambodia has made a rapid and remarkable progress since 2010 until recently. The sector’s growth was reflected by the increase of the number of new institutions, assets, customers’ loans, customers’ deposits, financial operational network, and the new financial products and services. Microfinance plays an important role as a source of funds for people in the rural area, allowing them to create and expand of their small and medium-sized business; this has actively contributed to supporting the people’s living standard, reducing poverty, and especially spurring the economic development.
According to report compiled by National Bank of Cambodia (NBC) In 2015, there are 58 microfinance institutions (MFIs), 8 of which are deposit-taking institutions. The growing number of MFIs had led to a 48.01% increase in total assets to KHR 14,625.92 billion, a 49.89% increase in the loan portfolios to KHR 12,244.36 billion, and a 47.31% increase in deposits to KHR 5,300.387 billion. Assets and credits-to-GDP ratios of MFIs stood at 19.52% and 16.19% with the shares of lending to agriculture, household, trade and commerce, service, construction and Transportation, and others accounting for 35.24%, 26.22%, 19.35%, 10.66%, 7.17%, and 1.36% respectively. The rapid increase in microfinance loans and brought an increase in the number of borrowers by 14.80% from 1,774,815 to 2,037,424 as compared to 2014, whereas the average loan size grew from KHR 8,219.14 billion to KHR 12,244.36 billion. The increase in the average loan size indicated the upward demand of and access to credit by the rural population, signifying the growth of rural economy as well as the living standard, because borrowers need to present a clear business plan and repayment capacity prior to getting the loan approved. NPL ratio kept a low record of 0.77%. On the other hand, the increase in public confidence and awareness on the situation of the economy and microfinance had driven a notable rise of deposit by 7.07% of GDP.
Source: National Bank of Cambodia (NBC)