Cambodia: Amret Moves up the Ratings Ladder

Mar 2016
Cambodia, March, 22 2016 - Amret Microfinance Institution, one of the largest in Cambodia’s crowded market, yesterday announced it had received an A- rating from independent rating agency Microfinanza, which is based in Italy, for improving its operation and for its strong performance over the past year.

Microfinanza’s ratings report, which was issued earlier this year, praised Amret’s “operational efficiency and productivity levels” and said its “marketing position remains good.”

Amret CEO Chea Phalarin told Khmer Times yesterday that his institution had improved the way it is run and its sound financial status were major factors in the improved rating.

“This vote of confidence from Microfinanza gives us a strong rating, and with our shareholders IFC extending further financing, we think 2016 will be a remarkable year where we will grow our deposit base and be able to lend more money to Cambodians who are working so hard to lift themselves out of poverty,” he said.

Microfinanza also praised Amret’s new shareholder structure, saying it “strengthened the strategic vision and financial stability” of the institution.

In March 2015, Amret announced a significant change in its shareholder structure with Luxembourg-based venture capital firm Advans SA increasing its shareholding to become the majority stakeholder and the International Finance Corporation (IFC) acquiring a 19.9 percent stake.

Last month IFC announced it will provide a $50 million financing package to Amret to help it increase lending to smaller businesses, particularly in the agriculture sector and in rural areas.

Say Sony, the Vice-President of Prasac Microfinance Institution, said the rating reflected the improved business performance of the institution.

“This means the institution is stable and well operated in terms of a management system and risk management. As a microfinance operator, we not only have this financial rating, but also a social rating,” said Mr. Sony.

He added that Prasac already had an A rating since last year on its business performance, well managed risks and its strong financial position.

Amret started in 1991 and changed to its current name in 2004. In 2009, Amret received its license to take deposits from customers and by February 2016 had $214 million on deposit and $450 million in outstanding loans.

Mr. Phalarin said his institution plans to open 10 new branches nationwide this year and he expects his loans and deposits will increase about 40 percent this year. Amret now employs more than 3,600 people across 138 branches in Cambodia.

“We will add 10 new branches to make it even closer and more convenient for our customers,” he said. “And with good economic activity this year, we hope that our loans and deposits growth will meet our expectations,” Mr. Phalarin added.

According to a report by the Cambodia Microfinance Association (CMA), by the end of 2015 there were 45 licensed MFIs operating with outstanding loans totaling nearly $3 billion, an annual growth rate of 42-53 percent, while total deposits reached $1.2 billion from $811 million in 2014, an increase of 53 per cent.

The portfolio at risk rate was at 0.67 percent in 2015, which the CMA claims is still a healthy figure.

Source : Khmer Times

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