Cambodia: Sathapana to Become a Commercial Bank

Mar 2016
Cambodia, March, 23 2016 - Sathapana Microfinance Plc, one of the largest in Cambodia, will officially transform itself into a commercial bank late next month, a move in line with Japanese-owned Maruhan Bank acquiring a 95.1 percent stake in 2012. It will be the second microfinance institute to become a bank after Acleda in 2009.

Bun Mony, President and Chief Executive Officer for Sathapana, told Khmer Times yesterday that the institution had received approval in principle from the National Bank of Cambodia (NBC) and is now preparing to move up to the commercial level while waiting for its license from the NBC. 

“We are planning to officially launch the transformation ceremony on April 22 because we expect that the National Bank of Cambodia will issue us the operating licenses within this month because we have submitted all the required documents to them,” he said, adding that he has been working and processing the licenses for almost six months.

Stephen Higgins, the Managing Partner of research firm Mekong Strategic Partners, told Khmer Times yesterday that the transformation of Sathapana will not be difficult as they are already a big player in the finance industry in terms of lending and business coverage. 

“The large MFIs are already very similar to commercial banks and they are increasingly crossing paths with the commercial banks in terms of the market segments that they serve. They lend money, they take deposits, they have large distribution networks and importantly they have very high levels of governance,” Mr. Higgins said. 

“The path that these large MFIs are taking in terms of converting to commercial banks is fairly similar to the path that Acleda took, and I think we can all agree that worked out well for Acleda and the entire Cambodian finance sector,’ he said. 

Mr. Mony said that although the institution is to become a commercial bank, the focus will still be mainly on providing loans to SMEs as well as giving more products to existing and new customers. 

“We will not consider changing immediately because it is not our skill. We will be sticking by our customers in microfinance and that is our stance because we have built a lot of our expertise in microfinance,” he said. 

“Of course, we do know that the criteria of loans and customers at commercial banks will be different from microfinance, but because our background is microfinance, we will still provide small loans,” he said. 

The NBC could not be reached for comment yesterday, but Mr. Higgins said the central bank has always backed MFIs on the transformation into the banking industry. 

“The NBC appears to be supportive of these MFIs converting to commercial banks, provided they have the right systems and processes in place, and importantly also have the right shareholders who understand commercial banking,” Mr. Higgins said. 

Sathapana started as an NGO in 1995 and it got a license to become an MFI in 2003. By the end of last year, it had more than 127,000 customers with outstanding loans of $472 million and total deposits of $260 million and presently has 159 branches.

Source : Khmer Times

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