South Korean banking giant KB Financial Group is increasing its bet on Cambodia’s microcredit industry, a fast-growing $13 billion sector facing increased scrutiny over concerns about overindebtedness and human rights violations.
New York-listed KB this month announced it had taken full ownership of Prasac Microfinance Institution, Cambodia’s largest microlender, completing an acquisition that began in April 2020 when it paid $603.4 million to buy 70% of the company from Sri Lanka’s LOLC Holdings.
As part of that deal, the companies included an options contract for the remaining 30% of shares that was triggered early, according to an August filing KB made to the U.S. Securities and Exchange Commission. KB Financial subsidiary Kookmin Bank acquired the 89 million shares for $322 million. One share will be held by Kookmin Bank’s Cambodian subsidiary.
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