by the MicroCapital Team -

SPECIAL REPORT: Responsible Investment Requires Responsible Exits – Applying a Fitness and Compatibility Review Matrix to Choose an Equity Buyer for AMK Cambodia

In 2012, Incofin’s Rural Impulse Fund II (RIF II) bought a 25-percent stake in AMK, a microfinance institution in Cambodia. Six years later, RIF II exited AMK, selling its stake to Shanghai Commercial and Savings Bank (SCSB). Dina Pons, Incofin’s regional director for East Asia, shares some insights on the exit AMK’s board of directorsprocess.

IN PHOTO: The last and first meeting of AMK’s board of directors: entering and exiting members ensuring a smooth transition.

MicroCapital: Please tell us a bit about AMK’s social performance and Incofin’s contribution to it.

Dina Pons: Founded in 2003, AMK is one of the largest and most recognised finance institutions operating in rural Cambodia. It serves around 700,000 clients nationwide with a unique set of financial services, including credit, savings, money transfers and insurance. AMK’s strong customer centricity and deep focus on rural clients were among the key attractions for us to invest in the company. Since its inception, AMK’s mission has been “to help large numbers of poor people improve their livelihood options through the delivery of appropriate and viable microfinance services.” Far from being just a theoretical motto, AMK’s social mission is what drives the institution and its staff to perform. For instance, a board-level social performance committee, which I was privileged to chair for three years, was tasked with checking each year whether

by Michelle Fleming -

MICROCAPITAL BRIEF: Hattha Kaksekar Limited (HKL) Approved to Issue $20m in Bonds to Support Microfinance in Cambodia

Having received approval from the Securities and Exchange Commission of Cambodia, Hattha Kaksekar Limited (HKL), a Cambodian microfinance institution, is set to become the first company in the country to issue corporate bonds. The initial offering will be for KHR 80 billion (USD 19.7 million) with

by the MicroCapital Team -

MICROCAPITAL BRIEF: Nonghyup (NH) Bank Acquires Microfinance Institution Samic of Cambodia, Plans More Lending for Agricultural Equipment, Housing, SMEs

NongHyup (NH) Bank, which is controlled by South Korea’s NongHyup Group, recently obtained regulatory approval to acquire Samic, a microfinance institution (MFI) in Cambodia, for an undisclosed price. NH Bank reportedly plans to change the name of the MFI to NongHyup Finance Cambodia.

Samic’s 18 branches are mainly located in smaller cities, and NH Bank plans to expand the organization’s presence in

by the MicroCapital Team -

MICROCAPITAL BRIEF: Shanghai Commercial and Savings Bank (SCSB) Buys 80% of AMK of Cambodia from Agora Microfinance, Incofin’s Rural Impulse Fund II, Norfund’s Cambodia-Laos Development Fund, Proparco

Incofin Investment Management, a Belgium-based impact investor, recently announced that its Rural Impulse Fund (RIF) II is among several entities selling a total of 80.01 percent of the shares of Cambodian microfinance institution Angkor Mikroheranhvatho Kampuchea (AMK) to Taiwan-based Shanghai Commercial and Savings Bank (SCSB). The other sellers are Agora Microfinance NV, a Dutch holding company; the Cambodia-Laos Development Fund of the Norwegian government’s Norfund; and the French government’s Societe de Promotion et de Participation pour La Coopération Economique (Proparco). While the sizes of the former shareholdings have not been released, each of the investors is exiting AMK completely, except for Agora Microfinance NV. AMK Staff Association,

by Nicholas Galimberti -

MICROCAPITAL BRIEF: Woori Bank of South Korea Acquires VisionFund Cambodia from Microfinance Subsidiary of US-based World Vision

VisionFund International, a UK-based NGO that offers microfinance services for World Vision, a US-based Christian relief and development organization, recently sold VisionFund Cambodia, a microfinance institution (MFI) serving rural

by the MicroCapital Team -

MICROCAPITAL BRIEF: Microfinance Institutions LOLC Cambodia, VisionFund Lanka Each Borrow $2.4m from Grameen Credit Agricole Foundation

The Grameen Credit Agricole (GCA) Foundation, whose head office is in Luxembourg, recently informed MicroCapital that it has issued three-year loans totaling the equivalent of USD 4.7 million to two microfinance institutions with ties to Sri Lanka.

LOLC Cambodia, which is owned by Sri Lanka’s LOLC Group, borrowed half of the total, denominated in US dollars. LOLC Cambodia was founded in 1994 as Thaneakea Phum (Cambodia) by US-based NGO Catholic Relief Services. The MFI has since been acquired by Sri Lanka’s LOLC Group, which is a member of Orix, a Japanese conglomerate. LOLC Group, whose name derives from

by the MicroCapital Team -

MICROCAPITAL BRIEF: 11 Microfinance Institutions in Cambodia Lose Licenses for Noncompliance

The National Bank of Cambodia (NBC), the central bank of the country, recently revoked the licenses of 11 microfinance institutions (MFIs) for failing to maintain compliance with a “diverse” range of rules. The MFIs, which are classified as “rural credit operators,” reportedly comprise a

by Ryan Gauthier -

MICROCAPITAL BRIEF: USAID to Guarantee $15m in Agricultural Lending by Cambodia’s AMK Microfinance Institution, LOLC, RMA Financial Services

Through its Development Credit Authority (DCA), the US Agency for International Development (AID) has agreed to guarantee a portion of agricultural loans totaling USD 15 million to be disbursed

by the MicroCapital Team -

MICROCAPITAL BRIEF: National Bank of Cambodia: Foreign Banks Struggling to Meet 10% Local-currency Lending Requirement Should Partner with Microfinance Institutions

The National Bank of Cambodia (NBC) continues to resist suggestions that it soften the decree it made in December 2016 that all financial institutions boost their local-currency lending to 10 percent of their portfolios by December 2019. NBC Director General Chea Serey reportedly said foreign banks struggling to meet the new threshold should partner with microfinance institutions (MFIs) because

by Jacob O'Driscoll -

MICROCAPITAL BRIEF: Cambodian Microfinance Association Members Refusing to Charge Clients Value-added Tax

The 82-member Cambodian Microfinance Association (CMA) recently announced that its affiliated microfinance institutions (MFIs) are declining to enforce the 10-percent value-added tax (VAT) that the country’s Ministry of Economy and Finance (MEF) has levied on financial services.

by Jacob O'Driscoll -

MICROCAPITAL BRIEF: IFAD, Cambodian Government, Private Sector Investing $60m in Microfinance, Infrastructure Program to Help 15k Farming Families Expand Operations

The government of Cambodia recently announced it has commenced the first phase of a project intended to aid 15,000 small-scale farming families in growing their operations by “building infrastructure to help farmers, and offering special microfinance deals.”

by Jacob O'Driscoll -

MICROCAPITAL BRIEF: Water.org Launches WaterCredit Investment Fund 3 to Facilitate Access to Sanitation, Clean Water in Cambodia, India, Indonesia, the Philippines

WaterEquity, the “social impact investment” subsidiary of US-based NGO Water.org, recently launched the WaterCredit Investment Fund 3 with the goal of raising USD 50 million to “invest in enterprises serving water and sanitation needs among the world’s poor.”

by the MicroCapital Team -

MICROCAPITAL BRIEF: Vision Microfinance Funds of C-Quadrat Loan $45m in Countries Including Bangladesh, Cambodia, Tajikistan, Nicaragua

C-Quadrat Asset Management recently informed MicroCapital that its Dual Return Vision Microfinance and Dual Return Vision Microfinance-Local Currency funds loaned a total approximately equivalent to USD 45 million during April to unidentified providers of financial services in a range of countries including Cambodia, Nicaragua and Tajikistan as well as – for the first time –

by the MicroCapital Team -

MICROCAPITAL BRIEF: Asian Development Bank Invests $1.5m in Equity in India’s M-CRIL to Expand Ratings in Cambodia, China, Indonesia, Nepal

Micro-Credit Ratings International Limited (M-CRIL), an India-based provider of rating and advisory services to the microfinance industry, recently sold an unspecified portion of its equity to the Asian Development Bank (ADB), a development finance institution with 67 member countries. One goal of the funding is to help M-CRIL expand in Cambodia, China, Indonesia and Nepal. ADB Principal Investment Specialist Anshukant Taneja said the investment will

by the MicroCapital Team -

MICROCAPITAL BRIEF: Microbank LOLC (Cambodia) Authorized to Offer Leasing Services

LOLC (Cambodia) Plc, a microfinance institution (MFI) that is 60-percent owned by LOLC Micro Investment of Sri Lanka, recently received approval from the National Bank of Cambodia to offer leasing services. It is reportedly the first MFI to gain such permission. Beginning in March, LOLC (Cambodia) expects to offer both businesses and

by the MicroCapital Team -

MICROCAPITAL BRIEF: Welcome Financial Group Acquires, Renames Green Central Microfinance of Cambodia

South Korea’s Welcome Financial Group (WFG) recently rebranded Cambodia’s Green Central Microfinance Limited as Welcome Finance (Cambodia). WFG closed its acquisition of the microlender after receiving central bank approval for the transaction in April. While the purchase price and the identity of the seller are not available, Green Central was held by

by the MicroCapital Team -

SPECIAL REPORT: The Impact of Finance on the Development of Micro, Small and Medium Enterprise (MSMEs) in Cambodia, Myanmar, Vietnam

ThisBanking With the Poor Network discussion of supporting micro, small and medium enterprises (MSMEs) centered on (1) building systems to boost institutions’ confidence in lending to the sector; and (2) the non-financial needs of MSMEs.

Gerald Sun, Vice President, Head of Sales for Commercial Payments Asia/Pacific at MasterCard Worldwide, said “the banks have trouble making a risk assessment cheaply enough. They lend to big organizations based on their income. For SMEs [small and medium enterprises], they revert to looking at assets as they would for consumer lending. The bank can value a house or car, but not a ton of fertilized chicken eggs.” MasterCard is addressing this issue by