This document discusses microfinance in Cambodia, providing statistics on the population, number of microfinance institutions (MFIs), borrowers, and depositors. It outlines the phases of microfinance development and notes that while MFIs originally shared social missions, they now focus more on commercialization. The document identifies several issues and challenges facing MFIs, including legal limitations, high funding costs, multiple borrowing, lack of credit assessments for farmers, and difficulties retaining rural staff. It concludes that allowing MFIs to offer more products and reducing funding costs could help them better serve clients and generate further growth in the sector.

1. Cambodian Microfinance in Agriculture
Issues and Challenges
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2. Cambodian Microfinance
Introduction
Operation Department
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3. Cambodia Demographic and Microfinance
Industrial Data – June 2013:
Population: +14 millions
 Estimated population below poverty line: 20%
 Rural population: about 11 Millions
 Number of MFIs: 37
 Loan outstanding: USD 1,088 Millions
 Deposit balance: USD 378 Millions
 Number of active MFI borrowers: 1,398,056
 Number of active depositors: 969,523

Operation Department
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4. Distribution
Network
Year
Sathapana Makes Your Life Better
No of
branch
No of
staff
2013(E)
75
1,897
2012
65
1,710
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5. Phases of Microfinance Development



1990 – 1995: Start-up Phase
1995 – 1999: Government-Supported
Institutionalization
1999 – Present: Commercialization and
Consolidation
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6. Business Nature


In early stage, MFIs in Cambodia have shared more
or less similar mission and vision brought from
their former status of NGO to licensed and
registered MFIs.
The main theme of their mission and vision have
been driven and dedicated to social and economic
development in rural area whereby it serves as a
contributing factor for the Government’s goal of
poverty alleviation.
Operation Department
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7. Microfinance Operators
Microfinance Operators
Items
2008
2009
2010
2011
2012
June-2013
Number of Licensed
MFIs
17
20
22
28
35
37
CMA members
17
20
22 MFIs & 1 28 MFIs & 2 33 MFIs & 2 35 MFIs & 5
NGOs
NGOs
NGOs
NGOs
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8. Cambodian Microfinance
Issues and Challenges
Operation Department
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9. 




Legal Framework limiting the ability of MFIs to diversify
products and services.
High Cost of Fund - High cost of fund prevents MFIs from
achieving their potential in helping to develop the rural
economy as well as the country as a whole.
Multiple Loans - The prevalent of multiple lending,
whereby an individual has taken out loans from more than
one MFIs, has reached a strenuous point.
Lack of a thorough credit assessment as many farmers
don´t have a credit history, no bank accounts, and
insufficient financial management capacity of the farmers.
Multiple land titles – Multiple land titles for the same land
lot to villagers continue to be issued and duplicates are
provided as collateral for loans to multiple MFIs.
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10. 
High transaction costs due to geographical dispersion of
clients and poor infrastructure.

Staffing Issue - Difficulties in finding, hiring and keeping
well trained staff who is willing to work in a rural region.


Absent of Risk Transferring Tools – Both agriculture
guarantee and credit insurance yet to be implemented to
address production risks faced by famers as well as
credit risks faced by Financial Institutions.
Oversaturation - Some regions are experiencing an
oversaturation of MFIs, with the ration of MFIs to
population having reached a point where MFIs are facing
increasingly unfair competition.
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11. And Finally ……..


For MFIs to achieve their potential to serve more
clients, they need to be able to offer a wider range of
products and services, and to reduce their cost of
funds so as to remain commercially sustainable, while
serving the lower end of the market.
Providing a legal framework that would enable MFIs to
offer more products and services would help generate
further growth in the sector, and to improve access to
finance for many more Cambodians.
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12. Thank You
for Your Kind Attention
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