Cambodia: Microfinance Recruitment Slowing
Phnom Penh, Cambodia, March, 16 2009 -
Economic downturn forces fast-expanding MFI sector to scale back employment plans.
The rate of job creation in the microfinance sector will slow sharply this year as the sector's previously high levels of loan growth start to slow, the industry body has warned.
Bun Mony, chairman of lender Sathapana Limited and a board member of the Cambodian Microfinance Association (CMA), forecasts sector-wide employment growth could be as low as 5 percent this year, far lower than previous years.
He was speaking at a workshop for senior staff of the country's 18 microfinance institutions (MFIs), and he told journalists that 10,000 people currently work in the sector.
"New direct labour recruitment has risen 30 percent each year in the last few years, but due to the [global economic] crisis, new recruitment is forecast to grow only 5 to 10 percent this year," Bun Mony said.
Bun Mony said the sector had lent US$740 million to a million borrowers in 2008 - an increase of 61 percent on the previous year's loan portfolio.
However, he expects growth in the industry's lending will slow sharply this year to 10 to 20 percent, because cash-strapped foreign investors - who account for 80 percent of capital inflow - will invest less. For that reason, he said, companies would need to hire fewer employees.
CMA Chairman Hout Ieng Tong predicted graduates would face tougher competition for posts at MFIs.
"Normally when MFIs recruit staff, many university graduates apply for those posts," he said. "Due to the crisis we have cut the number of new staff recruitments. Sometimes we recruit only 20 employees but have thousands of applications."
Chea Phalarin, general manager of MFI Amret, agreed, saying that his company employs 810 employees - a rise of 50 percent on the previous year.
"However, the financial crisis means we plan to recruit only 30 percent new employees to expand our operations," Chea Phalarin said.
He added that Amret's loan book last year was up 80 percent, with $54 million lent to 230,000 customers. Yet Chea Phalarin predicted loan growth for his firm would slow to 40 percent this year.