Phnom Penh, Cambodia, October 23, 2008–
IFC, a member of the World Bank Group, has pledged more support for microfinance in Cambodia to help local institutions expand their reach in remote areas. Given the global financial crisis, this is especially important in a country where more than a third of the population live below the national poverty line, more than 80 percent of population resides in rural areas and unemployment is high.
Lars Thunell, IFC Executive Vice President and CEO, made this pledge at a ceremony announcing assistance to Angkor Microfinance Kampuchea, one of Cambodia's largest registered microfinance institutions. Thunell said, "Microfinance institutions have an important role to play in Cambodia. Supporting AMK will help extend much-needed services to parts of the country where they are needed most."
IFC will advise AMK on its overall strategy and development of new products and services, including agricultural financing. IFC will also provide advice on taking deposits from the public, which has just been legalized in Cambodia, as well as possible mergers with other microfinance institutions.
Paul Luchtenberg, CEO of AMK, said, "Cambodia's registered microfinance institutions are cheaper and more reliable than unregulated money lenders and pawn brokers who charge very high interest rates. We are also accountable to the government and shareholders, ensuring high standards of service, governance, and transparency."
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. Its efforts are enabling poor farmers to increase their incomes and improve their lives.
IFC has pledged to double its global support for microfinance to $1.2 billion over the next three years. Research by AMK shows that microfinance can help improve the livelihoods of borrowers, including increasing access to better housing, health care, and education.
In Cambodia, IFC has made direct investments besides attracting international capital to the microfinance sector. A good example is IFC support of ACLEDA in its transformation from an NGO into one of the largest commercial banks in the country. IFC’s other contributions include providing advisory services and training through the Cambodia Institute of Banking, and helping establish and support the Cambodian Microfinance Association. IFC is also working on important regulatory reforms that will allow the sale of microinsurance.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit
www.ifc.org
.
In the Mekong region, IFC advisory services are delivered primarily through MPDF, a private sector development initiative, whose donors are Australia, Canada, the European Union, Finland, IFC, Ireland, Japan, New Zealand, the Netherlands, Norway, Sweden, and Switzerland.
About Angkor Microfinance Kampuchea
AMK
is a strong, fast-growing microfinance institution in Cambodia, with a pro-poor focus. Its 180,000 clients are mostly located in remote areas. They include farmer who produce rice, fruits, and vegetables and raise livestock. Borrowers also earn income through small-scale fishing, trading, and temporary labor. Group loans constitute about 68 percent of lending and individual loans about 32 percent. The average loan size is $80. AMK uses a poverty-scoring system to assess impact. Its loan portfolio was $16 million as of June 2008.
