Microfinance updates?

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Doc67
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Re: Microfinance updates?

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yongchi wrote: Mon Apr 13, 2020 5:48 pm Major change for PRASAC:


"PRASAC, the largest microfinance deposit-taking license institution with 25 years of experience in Cambodia financial market, announces a new majority shareholder from South Korea, KB Kookmin Bank.

KB Kookmin Bank, a leading commercial bank in South Korea, has successfully acquired 70 percent of PRASAC Microfinance on April 10, 2020. It allows PRASAC to become one of the subsidiaries of KB Financial Group. KB Kookmin also plans to incorporate the company as a wholly owned subsidiary when it acquires additional 30% of remaining shares in the future."
according to FreshNewsAsia (4/13/2020)

http://en.freshnewsasia.com/index.php/e ... 45-07.html
That's good news for Prassac and all who have deposits with them. A very grown up owner now in charge with deep pockets.

https://en.wikipedia.org/wiki/KB_Financial_Group_Inc

31/10/2019
Capital Intelligence Ratings (CI Ratings or CI), the international credit rating agency, today announced that it has upgraded the Long-Term Foreign Currency Rating (LT FCR) and Short-Term Foreign Currency Rating (ST FCR) of KB Kookmin Bank (KB) to 'A+' and 'A1', respectively, from 'BBB+' and 'A3'. The Outlook for the LT FCR remains Stable. At the same time, CI Ratings has assigned to the Bank a BSR of 'bbb', also with a Stable Outlook, a Core Financial Strength (CFS) rating of 'bbb-', and an Extraordinary Support Level (ESL) of Very High.
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Re: Microfinance updates?

Post by truffledog »

Having such a good rating means getting financed at nearly 0% nowadays. So no need to charge 18% to poor farmers for giving out loans and call it microfinance.But I guess it won't happen.
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Re: Microfinance updates?

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truffledog wrote: Tue Apr 14, 2020 3:11 pm Having such a good rating means getting financed at nearly 0% nowadays. So no need to charge 18% to poor farmers for giving out loans and call it microfinance.But I guess it won't happen.
And will they need to be paying people 8% on their deposits? Why bother when you can finance yourself at next to nothing?
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Re: Microfinance updates?

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Doc67 wrote: Tue Apr 14, 2020 3:18 pm
truffledog wrote: Tue Apr 14, 2020 3:11 pm Having such a good rating means getting financed at nearly 0% nowadays. So no need to charge 18% to poor farmers for giving out loans and call it microfinance.But I guess it won't happen.
And will they need to be paying people 8% on their deposits? Why bother when you can finance yourself at next to nothing?
IMHO its simply stupid and a waste of money. Lets see if those deposit rates will change in the near future as the investment in Prassac should be safer now with the deep pockets/good ratings of the korean new owner. What would you do as CEO of Prassac? I would lower the microfinance rates for loans and therefore get a bigger share of the market. If the competitors have no access to global funding at lower rates (which the Korean mother seems to have) you just drain the competitors margins and kick them out of the market.
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Re: Microfinance updates?

Post by Doc67 »

truffledog wrote: Tue Apr 14, 2020 3:44 pm
Doc67 wrote: Tue Apr 14, 2020 3:18 pm
truffledog wrote: Tue Apr 14, 2020 3:11 pm Having such a good rating means getting financed at nearly 0% nowadays. So no need to charge 18% to poor farmers for giving out loans and call it microfinance.But I guess it won't happen.
And will they need to be paying people 8% on their deposits? Why bother when you can finance yourself at next to nothing?
IMHO its simply stupid and a waste of money. Lets see if those deposit rates will change in the near future as the investment in Prassac should be safer now with the deep pockets/good ratings of the korean new owner. What would you do as CEO of Prassac? I would lower the microfinance rates for loans and therefore get a bigger share of the market. If the competitors have no access to global funding at lower rates (which the Korean mother seems to have) you just drain the competitors margins and kick them out of the market.
There's a lot of rich Khmers who are well connected that wont be happy about their easy income being interfered with. Why give all that lovely interest to the poor? Maybe they could become an obstacle to Kookmin buying the remaining 30%?

They are still offering 5 year TD's. If they start getting pulled then you know the writing is on the wall for the depositors.

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Re: Microfinance updates?

Post by truffledog »

I guess that the rich khmers just leave their petit cash on a cambodian account. The really rich buy land, gold or property. Their big cash money is in safe heavens already. Preserving the capital to them is more important than 8% interest. But I must admit its tempting....but I personally would not sleep well anymore. Its not good times to lend to banks IMHO. At the end there is no guarantee in place. HE is in full power and can change any rules any time. Time will tell as usual.
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Re: Microfinance updates?

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"PRASAC, the largest financial institution in Cambodia, has participated in the “SME Co-Financing Scheme,” an initiative of the Royal Government of Cambodia, aimed at providing low-interest loans to bolster and develop the small and medium sized enterprises in Cambodia.

This loan scheme will enable PRASAC to provide loans to small and medium enterprises with an investment capital up to KHR 1.26 billion (or USD 300,000) or with working capital up to KHR 840 million (or USD 200,000) for their businesses with a special interest rate of 7 percent per annum and loan term up to 4 years."

from http://en.freshnewsasia.com/index.php/e ... 41-31.html

Who can apply?
Hair dressers, Tuk Tuks, restaurants, etc. all would likely love to get this kind of interest rate.
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Re: Microfinance updates?

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April 24, 2020
Banks and MFIs asked to reduce fees, waive penalties on clients

The National Bank of Cambodia has requested financial institutions to reduce credit-related fees and lift fines until the end of December 2020, according to a NBC letter.

The National Bank of Cambodia (NBC) has appreciated financial institutions for its good collaboration and good adherence to previous NBC measures.

The statement signed by Rath Sovannorak, NBC’s Director General of Banking Supervision, read that “In a situation where the world as well as the Kingdom is at risk of the outbreak of COVID-19, the Central Bank seeks the understanding of all banking and financial institutions to offer more customer preferences to ease their burdens during this difficult time, such as reducing credit-related fees and / or waiving any penalty on their clients from the date of this letter to the end of December 2020.

https://www.khmertimeskh.com/50716803/b ... n-clients/
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Re: Microfinance updates?

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Cambodian Microfinance Group Rejects NGOs’ Call For Debt Relief, as Workers Struggle Amid Coronavirus Shutdowns
2020-04-29

An organization set up to support Cambodia’s microfinance sector has rejected a call by NGOs for a blanket suspension of the repayment of loans made to Cambodians hard hit by recent business shutdowns amid the COVID-19 pandemic, saying requests for relief must be considered on a case-by-case basis.

Writing in a joint letter, 135 Cambodian community organizations and other groups have asked the Cambodia Microfinance Association (CMA) to halt for three months demands for repayment by the more than two and a half million Cambodians who now hold microloans.

These demands have now put the livelihood and land security of loan holders at risk, the letter says.

“Millions of workers in the tourist, garment and construction sector are facing layoffs and loss of wages,” the letter says, adding that government efforts to subsidize losses have largely failed to meet workers’ needs.

“These actions are necessary to ensure that people are able to survive this crisis without risking their health or homes, and are able to avoid further risky loans that could lead to bonded labour, human trafficking and other human rights abuses.”

In an April 28 statement, the CMA said however that requests for suspension will be considered only on an individual basis.
https://www.rfa.org/english/news/cambod ... 82949.html
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Re: Microfinance updates?

Post by Cooldude »

And the NGOs wonder why they're not welcome in Cambodia? This is between the banks, MFIs and their clients. Let them work it out between themselves. Nothing gets a group of a$$holes together quicker than something that is none of their business.
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