MICROCAPITAL BRIEF: LOLC Cambodia Borrows $7m from Nordic Microfinance Initiative to Expand Financial Access in Rural Cambodia

The Norway-based Nordic Microfinance Initiative (NMI) recently announced a subordinated loan of USD 7 million to Lanka Orix Leasing Company (LOLC) Cambodia, a member of the Sri Lanka-based LOLC Group, to expand lending and leasing services for individuals with low incomes who live in rural areas. The deal follows LOLC Cambodia’s repayment of a senior loan that NMI disbursed to the microbank in 2018.

LOLC Group is a unit of Orix Corporation, a financial services provider founded in 1964 and based in Tokyo, Japan. Orix is active in retail banking, leasing, life insurance, securities brokering, venture capital, and real estate financing and development. The firm has operations in Asia, Africa and North America. For the year ending March 2022, it generated revenue of JPY 2.5 trillion (USD 18 billion) on assets totaling JPY 14 trillion (USD 107 billion).

LOLC Group has operations in a range of industries in Cambodia, Myanmar, Pakistan and Sri Lanka. As of March 2021, the company reports one-year return on equity of 24 percent and total assets of LKR 874 billion (USD 2.4 billion).

LOLC Cambodia was founded in 1994 as Thaneakea Phum (Cambodia) by US-based NGO Catholic Relief Services. It since has transformed into a for-profit institution that offers savings, credit, insurance and mobile banking. As of March 2022, LOLC Cambodia reported USD 1.3 billion in total assets. Most of its customers are women who live in rural areas.

NMI was founded in 2008 with the goal of creating jobs and wealth via financial inclusion. The organization manages five funds holding aggregate assets of about USD 350 million as of 2022. These include four microfinance funds and a climate fund encouraging “Indonesian smallholders [to] intensify work on their existing plots instead of clearing rainforest.” NMI is owned by Norfund, which is backed by the government of Norway; the Danish Investment Fund for Developing Countries, which is known by its Danish acronym IFU; and eight private companies as of 2022. The organization has offices in Denmark, India, Indonesia, Kenya and Norway.

By Ben Greissman, Research Associate

Sources and Additional Resources

NMI press release
https://www.nmimicro.no/news/nmi-invests-in-lolc-cambodia/

LOLC Cambodia homepage
https://www.lolc.com.kh

LOLC Group overseas operations description
https://www.lolc.com/overseas-expansion

LOLC Group annual report
https://www.lolc.com/annual-reports

Orix annual report
https://www.orix.co.jp/grp/ir/library/annual_report/

NMI homepage
https://www.nmimicro.no

Previous MicroCapital article on NMI
https://www.microcapital.org/microcapital-brief-juhudi-kilimo-rural-mfi-in-kenya-sells-39-equity-stake-to-nordic-microfinance-initiative-for-3-1m/

Previous MicroCapital article on LOLC Cambodia
https://www.microcapital.org/microcapital-brief-microfinance-institutions-lolc-cambodia-visionfund-lanka-borrow-2-4m-grameen-credit-agricole-foundation/

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