During his recent trip to the Mekong region, Executive Vice President and CEO, Lars Thunell pledged greater IFC support for microfinance in Cambodia.
At a ceremony announcing IFC advisory services for Angkor Microfinance Kampuchea, Thunell said, “Supporting AMK will help extend much-needed services to rural parts of the country where they are needed most. Given the global financial crisis, this is especially important in a country where more than a third of the population lives below the national poverty line, more than 80 percent of the population resides in rural areas and unemployment is high.”
IFC will advise AMK, and likely other MFIs as well, on overall strategy and development of new products and services, including financial products for agriculture. IFC will also provide advice on taking deposits from the public, which has just been legalized in Cambodia, and on possible mergers with other MFIs.
AMK serves nearly 180,000 clients, mostly subsistence farmers who are among Cambodia's poorest people. In less than 10 years, the company has transformed from a donor-dependent entity into a self-sustaining enterprise.
Paul Luchtenburg, CEO of AMK, told the audience that poorer people have traditionally borrowed, saved, and transferred money in Cambodia. “But Institutional microfinance of the kind offered by AMK and Cambodia’s 16 other registered microfinance institutions is both cheaper and more reliable than informal microfinance. By lending to thousands of clients, MFIs can lend at interest rates that are half of what money lenders charge, and being accountable to government and shareholders, ensures high standards of service, governance and transparency.”
Luchtenburg also said that research conducted in Cambodia by AMK and by others around the world, demonstrates that microfinance can improve living standards. “Greater earnings from farms and micro businesses can pay for better housing, better health care, better transportation, and more years of schooling for their children.”
IFC has been promoting microfinance in Cambodia for nearly ten years, beginning with advisory services, equity and loans for ACLEDA, which is now one of Cambodia’s largest and highest rated banks. IFC has also helped other MFIs attract international financing, set up and continues to advise the Cambodian Microfinance Association, and is now helping government on regulatory reform, including legalizing the sale microinsurance.
