Prime Minister Hun Sen yesterday lashed out at the opposition party’s concerns over the interest rates charged by commercial banks to farmers.
SRP lawmaker Yim Sovann said commercial banks in Cambodia charge customers very high interest rates, and said it is much higher than in other countries.... continue
As rising economic growth spurred demand for personal loans, Prasac, Cambodia’s biggest microfinance institution (MFI), provided $106 million in loans between March, 2012 and March, 2013, an increase of 66 per cent compared with the corresponding period a year earlier. …
“Loans [were] mainly used for service and trade activities, representing 44 per cent; followed by agriculture, [accounting for] 30 per cent; and personal loans, [accounting for] 23 percent,” [Prasac president and chief executive Sim Senacheert] said. …
According to a study released this month on micro-finance borrowing in Cambodia, “The sharp growth of the sector has resulted in substantial competition, and there have been concerns that it may be leading to cross-lending and, possibly, over-indebtedness of borrowers.”…
The Cambodia Securities Exchange (CSX) has seen slow progress in its first year of operations because there has been only one listed firm and public knowledge about the stock market remains low, officials said Thursday.
The CSX was officially launched trading on April 18 last year with only one listed enterprise, the state-owned Phnom Penh Water Supply Authority (PPWSA).
“Because there is only one product in the stock market now, so the trading action is limited,” Ming Bankosal, Director General of the Securities and Exchange Commission of Cambodia, which is the CSX’s regulator, told Xinhua over telephone. “I believe that the situation will be improving from this year as three or four enterprises are planned to list on the CSX this year.”
He said at the launching of the CSX, there were only 3,600 investors, but it was now up to 5,000 investors. …
The PPWSA sold 13 million shares in its first IPOs (Initial Public Offerings) in last April with a share going for 6,300 riel (1.57 U.S. dollars).
In May, the highest-priced stock was about 2.55 U.S. dollars a share, and then, it had gradually lowered to 1.55 U.S. dollars. …
When the owner of Kingsland garment factory fled the Kingdom last year, enough pressure was applied to its sourcing companies H&M and Walmart to persuade them through their intermediaries to compensate workers left jobless. Distance could no longer absolve them of responsibility.
Just like the Kingsland employees who took their protest to the US and Swedish embassies to lobby Walmart and H&M, former Mfone employees took their protest to the Thai and Singapore embassies last week to apply pressure on the parents of the failed Cambodian company. …
For Dave Welsh, country director for the American Centre for International Labour Solidarity, companies that are inextricably linked to failed organisations should also be held to account. …
“Look at the corporation as whole, not just at Mfone. Look at the corporate links in Singapore and Thailand,” Welsh said. “The analogy of the situation is H&M and Nike aren’t incorporated in Cambodia, but they are morally, if not legally, on the hook for things that happen in their factory.” …
The World Bank upgraded Monday its GDP growth forecast for Cambodia to 7.0 percent for this year, up 0.3 of a percentage point from its last projection in December.
“In Cambodia, a likely stabilization in high-income country conditions should support further improvements in garment production and exports,” the bank said in explaining the upgrade. …
Cambodia’s growth last year, estimated at 7.3 percent, was “faster than expected,” the update said, adding that it was “bolstered by the strong performance of agriculture, construction and tourism and a recovery in garments.”
In a separate statement, World Bank East Asia and Pacific Vice President Axel van Trotsenburg said the region accounted for about 40 percent of global growth last year. …
After years of immersion in a vicious price war, battle weary and capital-haemorrhaging [sic] mobile operators in Cambodia’s oversaturated telecommunications sector may finally have reason to breathe a sigh of relief; 2013 might be cited as the year the tide turned. …
Tarred by legal threats, unfair competition practices, trash-talking in the media and engagement in cripplingly expensive advertising campaigns, the industry’s ugly side has reared its head on several occasions since the market started overcrowding in 2006. Yet recent and long overdue consolidations in the market have some chief executives trading their swords for confetti, handshakes and electric-light breakdancers.
With over five million subscribers, Smart is now the second-largest operator in the country behind Metfone, owned by Viettel, a military-backed Vietnamese-owned telecommunications firm. Smart plans to expand its network and operational coverage throughout Cambodia and reinvigorate investors to develop infrastructure, says [Thomas] Hundt. [CEO of the repackaged brand ‘Smart’]. All the while the merger removes interconnection fees between Hello and Smart mobile users – a blessing in a market that operators claim is under-regulated and where complaints have been filed against companies that have not paid interconnection fees. …
With the industry reduced to six active operators, experts and mobile operators agree that the two developments have birthed new life into a market that, until now, has sustained multimillion-dollar losses each year. Revenues from phone usage in the Kingdom remain low, while an infant smartphone culture yields limited capital from data plans. …
The merger followed hot on the heels of Thaicom’s announcement that its lawsuit-laden subsidiary Mfone, which had been operating in Cambodia for two decades, was insolvent. …
“I think that this had to happen… The market can now begin to move at a level with more sustainable competition finally, and in the long term we won’t see any more of these crazy price wars,” said Marc Einstein, an independent telecom analyst. “I think in a market the size of Cambodia, in terms of population and GDP [gross domestic product], you can only have three, maybe four operators for the sector to be sustainable.”…
“I would say that because of the initial rush of entrants, the equipment was improved substantially, but… now quality is definitely toward the bottom compared to Thailand or Vietnam,” Einstein said. …
At first, services improved. But as huge promotions became the industry standard, the price of a domestic call dropped to just $0.01 per minute, far below Thailand’s $0.05 to $0.06 per minute and around $0.15 per minute paid in Hong Kong. …
“The problem is that, even at six players, there is still going to be a price war at a high level of competition,” said Dimitry Bushik, chief commercial officer at Excell, one of Cambodia’s mobile operators. …
A court administrator and creditors who have filed complaints against bankrupt mobile operator Mfone are at loggerheads over whether or not to overturn two injunctions filed against the firm to stop it selling off its assets.
“The judges are now considering to drop the injunctions because we cannot delay any more as the price of Mfone’s assets continue to decrease each day,” Ouk Ry, the court- appointed administrator charged with overseeing Mfone’s liquidation proceedings, said yesterday at a meeting with 100 creditors at Mfones shuttered offices on Moniviong Boulevard. …
But those who filed complaints against Mfone say they do not want injunctions the injunctions lifted before the court orders Mfone to pay them what they are owed. …
Holders of shares in the Phnom Penh Water Supply Authority (PPWSA) have criticised the level of dividend payment that they will receive from the company.
PPWSA, which is the only company listed on the Cambodia Securities Exchange (CSX), was to pay its first dividend to 1,500 shareholders as of the close of business yesterday.
PPWSA will distribute a total dividend of 2.4 billion riel ($600,350), or 27.7 riel per share, to investors. However many investors said they are not happy with the amount. …
The Council of Ministers on Friday approved a draft law amending three articles in the law on anti-money laundering and the financing of terrorism in order to make Cambodia more investment-friendly. …
Last month, the National Bank of Cambodia’s Financial Intelligence Unit (FIU), law enforcement officials and private banks held a weeklong training program, supported by the British Embassy, aimed at arming Cambodian authorities with the knowledge needed to stop the exploitation of the country’s light regulations on financial crime. …
If you’ve applied for a mortgage recently, you know how hard it can be. The bank demands all kinds of obscure documents and wants proof of almost every asset you own. But an innovative mortgage program halfway around the world will evaluate your application without any extra documentation — and if you’re approved, it will give you a 15-year fixed-rate mortgage. There’s just one catch: The mortgages are only for low-income people in Cambodia. The program is a throwback to the days when bankers got to know their customers — and trusted them. …
Keng and her husband both work. She makes and then sells rice soup at a street stall, while her husband sells clothes at another stall. But they don’t meet one of the crucial requirements for getting a mortgage: They don’t receive salary slips or other financial documents, so they don’t have what bankers call “verifiable income.” …
Late last year, Keng heard about an unusual bank called First Finance, which was designed specifically to give mortgages to low-income people like her. She and her family could already imagine the new home they wanted to buy: a two-story house with indoor plumbing. It would cost about $20,000. …
The First Finance mortgage program in Cambodia was the brainchild of Talmage Payne …
Microfinance, he says, was not the solution. People needed much bigger, long-term loans to buy homes. Payne also says he realized something else that contradicts traditional banking assumptions: Low-income families make great mortgage customers.
Just about everybody in a typical Cambodian family works. The wife might run a market stall, while the husband does day labor.
“Grandma sells peanuts, the kids work,” Payne says.
As a result, many of the families are financially resilient. If one person has to stop working, the others can chip in.
“You’re giving somebody something that they never thought they could have. So no matter what the hardship is, what’s the one bill they’re not going to miss? They’re not going to miss the mortgage,” Payne says. …
Cambodia’s financial system appears to be shifting to excessive credit growth. …
The credit-to-GDP ratio has reached 37 percent, well above the low-income economies (LTCs). If credit growth were to continue at the current pace, by mid-2013 the ratio would exceed even the median for more advanced emerging market economies (EM). …
In considering macroprudential measures, the NBC must strike a balance between choosing an instrument that is simple to implement, effective in lowing credit growth, and causes the leas distortions to the credit market. …
The Ministry of Post and Telecommunications has revoked the operating licence of bankrupt phone operator Mfone, which went out of business two months ago, while more than 1,000 employees had their jobs officially terminated yesterday.
The revocation of the licence and the mass dismissal of the staff helped clear the way for the government-appointed administrator, Ouk Ry, to dissolve the company’s assets and repay some of the company’s debts, which are believed to top $160 million. …
A copy of the TRC notice, obtained yesterday, also states that Mfone owes the Ministry of Post and Telecommunications $743,332. …
Nim Solyda, a former engineering supervisor at Mfone and the employee’s representative, said the employees had filed a claim earlier this month for about $4.4 million in compensation for 1,092 workers.
“The Labor Law states that even though the company is bankrupt, they must still pay compensation,” he said. …
Two of Mfone’s largest creditors are Chinese telecommunications firm Huawei Technologies and Norwegian Company Elteck, who claim a total of $68.73 million in debts from Mfone.
The Phnom Penh Municipal Court had issued injunctions on behalf of both companies, and on Monday, the two firms discussed dropping their injunctions in order to allow Mr. Ry, the administrator, to dispose of Mfone’s assets quickly in order to pay off the company’s debts. …
Access to finance could reduce violence, empower the most vulnerable in society and improve the livelihoods of Cambodia’s poorest people, a conference on community-led funding heard on Wednesday. …
Sarah Sitts, country manager of the international NGO Pact, introduced the funding model of savings-led micro-finance (SLMF).
In contrast to credit-led microfinancing, in which an organisation lends to smallholders, SLMF was a fund established by 20 to 25 voluntary members who lend within that fund, Sitts said. …
According to Chanthavy Meas, program officer at a women’s empowerment project with PACT, SLMF has had a significant impact on the lives of more than 4,000 Cambodian women participating in the program. …
Taiwan Cooperative Bank, one of the leading banks in China’s Taiwan, officially commenced business in capital Phnom Penh on Thursday, bringing the number of commercial banks in the kingdom to 33.
Taiwan Cooperative Bank is the 2nd bank from China’s Taiwan in Cambodia after the Mega International Commercial Bank opened its door in September 2011. …
Cambodia sees fast growing in banking sector in recent years. As of last year, the kingdom’s commercial banks had lent a total of 5.89 billion US dollars to customers, a 34 percent rise year- on-year, according to the report of the National Bank of Cambodia.
On the deposit side, the customers’ deposits at the banks had amounted to 6.19 billion US dollars by last year, up 25 percent year-on-year, it said. …
Thousands of creditors have come forward alleging they are owed a combined $160 million by bankrupt mobile phone operator Mfone, the administrator appointed to the case said yesterday.
“Mfone owes money to hundreds of companies and thousands of individuals totaling $160 million,” he said. …
Nim Solida, a former engineer supervisor at Mfone who attended the meeting, said that the administrator had estimated the company’s remaining assets to be worth just $105 million. …
Eric Sidgwick, Country director of the Asian Development Bank (ADB) to Cambodia applauded Cambodia for managing it’s, sometimes problematic, public debts. …
During the Wednesday meeting with Deputy Prime Minister, Sok An, Eric Sidgwick said, good management led to the positive changes of donations and loans to Cambodia. …
The government, with the collaboration of ADB, aims to increase the GDP of its citizens to $4,000 by 2030, he added.
A major Vietnamese bank is closing its brokerage and securities arm in Cambodia, an official said yesterday, amid the ongoing drought of listings on the Cambodian Securities Exchange (CSX). …
Sacombank, which will continue to operate as a bank in Cambodia, set up the securities firm in January 2011 with $7 million capital.
[Tram Minh Trung, director-general of Sacombank Securities Cambodia Public Ltd. Co.,] said the company had informed the Securities and Exchange Commission of Cambodia (SEEC) that it was handing back its licence as a securities registrar, transfer agent and paying agent. …
The CSX still only offers the stocks of one company, the Phnom Penh Water Supply Authority, which listed in the bourse’s first and only initial public offering in April 2012. …
E. Sun Commercial Bank (玉山銀行), the banking arm of E. Sun Financial Holding Co (玉山金控), yesterday announced plans to buy a 70 percent stake in Phnom Penh, Cambodia-based Union Commercial Bank PLC (UCB) for US$69.33 million to facilitate its expansion into Southeast Asia.
“We decided to buy a stake in UCB, rather than set up a branch in Cambodia after discovering that USB shares similar ideas about business development with E. Sun Bank,” E. Sun Financial president Joseph Huang (黃男州) told reporters at the Taiwan Stock Exchange. …
Debt levels among the more than 1,000 families being evicted by a $142.6 million railway project bankrolled by Australia and the Asia Development Bank (ADB) have reached “crisis” proportions and require major intervention, according to a U.S resettlement expert who was hired by the ADB to study the impact of the project. …
In his recommendations, Mr. Cernea, said that evicted families were in many cases at risk of losing their new government-issued plots of land to moneylenders and that families falling into debt was “the single most dangerous risk” facing the resettled families. …
Among his recommendations was an immediate stop to evictees being able to swap their new land for loans, a thorough census of the families and their debts, and that the ADB and Ausaid work with the government on a “full, project-scale” solution.
He also questioned whether it was legal for the money lenders to take the families’ new plots of land as collateral and urged the partners in the project to see what they could do to nullify the loan deals or at least punish the lenders. …
Nhean Leang, who sits on the government’s resettlement committee, claimed that of the more than 4,000 families affected by the rail project, only 25 were actually being hurt and shifted any blame to the ADB and the families themselves.
“You should ask the ADB about the design, how they designed it. We just follow the designs of the Ministry of Transportation and the ADB,” he said. …
