Monday will be a big day for In Channy, a self-made man and former Site 2 Thai border refugee who has built Acleda Bank into the largest banking network in Cambodia.
On that day, the World Bank-International Finance Corporation will honor Acleda’s general manager at its Washington headquarters for leading what the IFC calls a “role model” enterprise—a Cambodian business free of corruption that is able to have a widespread impact on the lives of the nation’s poor.
Acleda beat 1,300 companies worldwide that have received IFC assistance to win the IFC Client Leadership Award.
In Channy, a 45-year-old father of four, began his banking career when he won a scholarship that took him from Site 2 to college in the US.
From its beginnings in 1993 as a local NGO with 28 staff members and $600,000 in capital, Acleda has transformed itself into a commercial bank with $80 million in loans, 2,349 employees, over 131,000 clients and 136 branches—by far the largest number in Cambodia.
“After working with them for years, I believe they are clean top to bottom,” Adam Sack, general manager of the IFC’s Mekong Private Sector Development Facility, said Wednesday.
While there are other banks in Cambodia that are exhibiting transparency, only Acleda combines honesty with widespread benefit to the poor, Sack said.
“We have clear policies against influence: We don’t want to employ any politicians to back us and we don’t want to be employed by them,” In Channy said on Wednesday.
“Let’s say the government official, high level, comes to us and wants a loan for no purpose; we will not give it to them,” he said.
In the legal vacuum of the 1990s, he said, the first thing to do in building Acleda into a commercial bank was to teach employees that no corruption would be tolerated.
“If you take one riel, one cent, then you are fired immediately,” he said.
“We also know that since we do not bribe civil servants, we must be precise ourselves and file our paperwork on time,” he said.
This independence has brought Acleda into occasional conflict with politicians, he added. In December 2001, Prime Minister Hun Sen ordered an investigation of Acleda after he was incorrectly informed that hundreds of Acleda debtors had been sent to prison.
“That is the worst allegation and the wrong allegation,” In Channy said. “That was two months before the commune election; I had no doubt why the politicians would try to do that. We were targeted because we are big and independent.”
In Channy said that Acleda has never sent a customer to jail, but it has taken collateral, something that it avoids at all costs. And it has taken 10 customers to court.
“Being a lender is like being a doctor: You don’t want your patient to die,” he said.
Acleda only lends businesses money after developing a business plan with them.
The result has been that less than 1 percent of its loans are not paid back, even though the smallest loans are charged 48-percent interest, In Channy said.
The smallest loan Acleda will make is $10.
“We have many cases of people who even the moneylenders rejected because they had nothing and lived along the wall of the pagoda,” he said. “We have customers who go from selling a few bananas to owning their own houses.”
Acleda is the only local bank rated by Moody’s, the international credit rating company. Since the Moody’s rating was announced, deposits at Acleda have increased from $39 million to $61 million, according to its financial reports.