Cambodia: developing access to financial inclusion in rural areas

AMRET is Cambodia’s second largest microfinance institution (MFI) in terms of portfolio size (USD 1m at end-December 2020, about 15% of market share) and has 505,473 clients, with 64% women. AMRET employs 4,633 people and has 158 branches covering Cambodia’s 25 provinces. The microfinance institution mainly operates in the rural sector. It has a total balance sheet of USD 1.379bn and collects the savings of over 404,000 depositors. The average amount of outstanding loans stands at USD 3,720, i.e. about 2.3 times GDP per capita. 

The project involves the allocation of a USD 20m senior credit line to the Cambodian microfinance institution AMRET to support the development of its loan portfolio. PROPARCO has been supporting AMRET since its creation: it is the fifth operation between PROPARCO (in debt and equity) and the institution.

Proparco has been a partner of several MFIs since 2007. It has also supported the Lending Guidelines project led by the Cambodian Microfinance Association (CMA), which in particular aims to prevent overindebtedness. AMRET’s social ambition is reflected in three areas. Firstly, the distribution of its loan portfolio (64% for women at end-December 2020, about 80% for microentrepreneurs and 7% of “solidarity” group loans). Secondly, the integration of the Client Protection Principles in the MFI’s procedures and practices. This has allowed it to obtain Smart Campaign certification (which now includes the Lending Guidelines). Finally, the launch of new products with beneficial impacts, such as the deposit product for the schooling of children and the product specifically designed for women.

The main expected impacts of this project are as follows:

• New or improved access to microcredit for some 5,000 beneficiaries
• Support for 2,070 jobs. 

This project should thereby contribute to the achievement of SDG 1 “No poverty” and SDG 8 “Decent work and economic growth”.