Cambodia Investment Review

PRASAC Microfinance Reports Strong Profit Growth in 2022 After Challenging Business Environment

PRASAC Microfinance Reports Strong Profit Growth in 2022 After Challenging Business Environment

Cambodia Investment Review

Cambodia’s largest microfinance institution PRASAC Microfinance Institution Plc. has reported a strong financial performance for the twelve-month period ended December 31, 2022, with total interest income of $593.22 million, an increase of 17.88% compared to the same period last year. The net profit for the period was $181.2 million, up 17.12% from the previous year. The non-performing loan ratio was 1.19%.

In 2021 PRASAC post an annual after tax profit of $155.5 million in 2021, increasing 42.9% from $108.8 million in 2020 as non-performing loans remain stable at 1.54%. The increase in profit was attributed to increased interest income rising to $505.35 million in 2021 from $430 million in 2020 from a rising number of depositor and loans the company made.

Read more: PRASAC annual profit rebounds 42% in 2021

As at December 31, 2022, PRASAC’s total assets were $4.8 billion, an increase of 12.25% compared to the previous year, and total equity was $857 million, up 28.22% compared to the previous year.

Tailored financial products

In a statement to the Cambodia Securities Exchange, Jun Kwi Sang, Chairman of PRASAC, said, “Despite the challenging business environment, PRASAC has played its essential part in contributing to sustainable economic development through continuing distributing new loans to its customers.”

He added, “PRASAC once again has demonstrated a strong growth on all main parameters, including the total assets, deposits and loans, profit as well as financial technology. We have learned a lot from the challenges of the past several years that made PRASAC become a strong and stable institution for 27 years of sustainable growth.”

PRASAC’s strong performance in 2022 was supported by its successful implementation of a sound business strategy, tailored financial products and services for target customers, excellent customer service, sound risk management, strong internal control, and effective compliance and enforcement, delivered by committed staff.

In addition, PRASAC has contributed to the development of Cambodia’s capital market by issuing the largest corporate bonds in the country’s history for a total amount of $31 million (KHR 127.2 billion), as Jun Kwi Sang highlighted, “PRASAC also played its crucial role in developing the securities market and promotion of the Khmer Riel.”

Strong rebound post-COVID

PRASAC has experienced a strong rebound since concerns over an $800 million “technical default” in 2020. Non-performing loans have been growing steadily but remain at a very manageable level from 0.31 in 2019, 1.37% in 2020 and now 1.54% in 2021.

In 2021, KB Financial Group fully acquired the company paying $322 million for the remaining 30% of the company. The group had already purchased 70% of the company for $603.4 million last year from Sri Lankan-based non-banking lender LOLC Holdings.

Read more: KB Financial Group completes acquisition of PRASAC paying $322M for remaining 30%

Cambodia Investment Review had reported at the time Oum Sam Oeun was appointed as President and Chief Executive Officer, after long time leader Sim Senacheert stepped after the KB Kookmin takeover.

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