Growth in the country’s expanding microfinance sector slowed slightly in the last quarter of 2015, but both loans and deposits finished the year about 45 percent higher than at the end of 2014, according to figures from the Cambodia Microfinance Association (CMA).
The country’s 41 microfinance institutions (MFIs) and seven NGOs registered as money lenders had a total of about $2.95 billion in loans on their books at the end of last year, compared to $2.03 billion at the close of 2014. The same MFIs and NGOs reported about $1.32 billion in deposits, up from about $900 million last year.
The 45 percent increase in loans and 46 percent increase in deposits is down from year-on-year figures for the first nine months of the year, when loans were up 52 percent and deposits up 53 percent.
Although some have warned of a looming credit bubble as the gap between loans and deposits continues to widen in the MFI sector, economist Kang Chandararot said yesterday that the disparity was not a pressing concern.
“It is not necessary for the gap…to be narrowed because deposits are not the main source [of funds] for MFIs,” Mr. Chandararot said, explaining that unlike commercial banks, which rely largely on customer deposits, investors are the main source of funds for MFIs.
“But if the gap is too big, MFIs would have problems in terms of cash flow…if depositors withdraw their deposits urgently,” he said.
Bun Mony, president of the CMA and CEO of the MFI Sathapana Limited, said the rate of growth in the industry was healthy, and that rising deposits showed increasing consumer confidence in the sector.
“It means the public starts to recognize that microfinance is a safe place to deposit their money,” he said. “We want to see the loans and deposits grow at a similar pace to this.”
