Cambodia Investment Review

LOLC Cambodia posts $14M Q1’22 net profit

LOLC Cambodia posts $14M Q1’22 net profit

Harrison White

Microfinance provider LOLC Cambodia has posted an after-tax profit of $13.9 million an increase of almost 20% from $11.6 million in the same period last year while overdue loans remained stable but have increased to 2.17%.

The MFI posted an after-tax profit of $54.6 million for 2021 increasing 22% compared to $44 million in 2020. To read more about LOLC Cambodia 2021 annual report click here.

In a quarterly statement Sok Voeun, Chief Executive Officer of LOLC Cambodia and the newly appointed microfinance association chairman said LOLC was able to maintain good loan quality as of Q1-2022 as LOLC has conducted its operations with caution. LOLC’s assets reached more than $1.32 billion.

The deposit balance reached $633 million, an increase of 14% compared to the end of 2021. The gross loan portfolio reached $1.13 billion, an increase of 9% compared to the end of 2021, while loans over 30 days duedate were 2.17%.

Client protection award

The MFI was also awarded the Client Protection Certification at the Gold Level of achievement from Cerise and SPTF. The Gold Level is the highest level of achievement and signifies that the certified institution meets the most rigorous standards of client protection found in the Universal Standards for Social Performance Management.

According to the latest credit report on the sector, almost 13% of borrowers had three or more loan accounts and 28% were borrowing from multiple lenders across the sector.

Loans past 30 days due date remain stable but have been increasing since 2020.

In response, the sector has revised the current Lending Guidelines to Prevent Over-Indebtedness for loans under $20,000 introducing requirements for lenders to stop clients from obtaining multiple loans from different institutions.

To read more about the newly implemented lending guidelines for financial institutions in Cambodia click here.

Three years since bond listing

The quarterly report also commented that 2022 will mark three years since the company’s KHR 80 billion ($20 million) corporate bond was issued resulting in the Khmer Riel Loan Portfolio rising to 29% of the total loan portfolio.

In 2016, the National Bank of Cambodia issued a prakas that instructed all banks and MFIs to hold a minimum 10% of their loan portfolio in riel.

Underwritten by Yuanta Securities, the bonds were subscribed with a return rate of 8% a year for FX-indexed bonds and 9% for fixed-coupon bonds with a maturity date of three years. A total of 800,000 bonds were issued, valued at KHR 100,000 per unit.

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