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IFC Supports First-ever Bond Issuance in Cambodia

Phnom Penh, December 17, 2018 —IFC, a member of the World Bank Group, has invested $20 million equivalent in riel-denominated bonds issued by Cambodian microfinance institution Hattha Kaksekar Limited (HKL). The investment helps create a domestic corporate bond market and allows HKL to expand its local currency lending to micro and small businesses, including farmers and women entrepreneurs.
Access to finance is a major obstacle to doing business in Cambodia, as the financing gap for micro, small and medium enterprises is estimated to represent as much as 21 percent of the country’s gross domestic product. Moreover, the dominance of the U.S. dollar in the economy has left smaller, rural businesses - which rely heavily on the riel local currency - particularly vulnerable to potential currency fluctuations.
Within this context, HKL as the third largest micro lender in Cambodia became the first firm to issue and list its riel-dominated corporate bonds on the Cambodia Securities Exchange (on December 5). Out of 1.2 million three-year tenor bonds worth 120 billion riels ($30 million equivalent), IFC bought 800,000 bonds. The funds will help HKL offer thousands of additional loans, with majority of them to women.
“The listing gives us greater ability to expand our riel lending to rural micro, small and medium enterprises, including women entrepreneurs, and to upgrade to new technology in our operations for the convenience of our customers,” said HKL’s president and CEO Hout Ieng Tong. “This means we will be able to help them reach their full potential and deliver greater prosperity to rural communities, and at the same time grow our own business.”
IFC investment was supported by the International Development Association’s Private Sector Window, a new initiative to catalyze private sector investment and create jobs in the IDA countries. The facility enabled IFC to provide medium-term, local currency funding at a local market rate to allow HKL to provide affordable loans to rural borrowers. This will not only expand local currency access for farmers and small business owners, it also sends a confident signal to help Cambodia develop local currency funding over the long-term.
“This country’s first-ever bond issuance is a milestone in the development of Cambodia’s debt capital markets and a sign of confidence in the country’s banking and financial sector,” said Kyle Kelhofer, IFC Country Manager for Cambodia, Lao PDR and Vietnam. “IFC is pleased to participate as an anchor investor in this issuance and we will continue working with key stakeholders and market participants to establish the debt capital market in Cambodia, helping mobilize funding to fuel economic growth, job creation and shared prosperity.”
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit
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