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DEG supports lending to small and medium enterprises in Cambodia

Press Release from 2020-05-08 / DEG

Loan of USD 15 million for longstanding partner ACLEDA

The Corona pandemic and its repercussions are also having a negative impact on the economic situation in many developing countries. This is why it is all the more important that small and medium enterprises (SME) in those countries continue to have access to loans. To facilitate access in Cambodia, DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH is providing Cambodian ACLEDA Bank Plc. (ACLEDA) with a long-term loan of USD 15 million. The bank headquartered in Phnom Penh offers funding for SMEs and private clients. DEG has been supporting ACLEDA for 20 years, initially as a shareholder, later as a lender.

The “tier 2” loan now committed by DEG is part of a two-phase funding tranche totalling USD 110 million from the International Finance Corporation (IFC), a member of the World Bank Group. In the first round of funding in summer 2019 DEG had already committed USD 20 million to ACLEDA.

Expansion of digital banking services

“With this commitment we are helping a successful local commercial bank to carry on its lending business for small and medium enterprises even in the current situation. At the same time we are supporting our longstanding partner in its digitalisation strategy, which aims to greatly expand the proportion of digital banking services, such as mobile payment systems,” stated Monika Beck, member of DEG’s Management Board.

“We highly appreciate our long-term partnership with DEG and its support towards our growth, especially during the time of COVID 19 pandemic. The financing support from DEG helps ACLEDA Bank Plc. to continue expanding its lending and digitalisation strategy in the market. It is crucial to fulfil the need of SMEs to access loans to support their financial condition during the difficult time of COVID 19 spread. We look forward to continuing our partnership and opportunities for collaboration in the future”, stated Dr. In Channy, President & Group Managing Director ACLEDA Bank Plc.

ACLEDA’s success story started in 1993 when the non-governmental organisation at the time provided funding to help war survivors make a fresh start. Since late 2003 the institution has had a full banking licence and has now become the largest commercial bank in Cambodia. With 263 offices and more than 12,000 employees, Acleda provides loans to around 400,000 customers. The focus is on small and medium enterprises; and more than half of the businesses are run by women.

Thanks to the long-term refinancing by DEG and its partners, ACLEDA will be able to grant more loans in future and thereby help their clients to continue safeguarding jobs. Furthermore, ACLEDA generates local income: this includes wages and salaries, interest expenses as well as income tax.

DEG support in Corona times much in demand

At various levels DEG is giving targeted support to private companies in developing countries as they face the current challenges. For instance, businesses already funded by DEG can also obtain DEG co-financing of Corona-related measures via the advisory Business Support Services. These include expenses for additional protective equipment or supplying food and relief items to neighbouring communities.

Further information

BSS - COVID-19 Rapid Response

Solutions for financial institutions

Contact

DEG Press Office

Anja Strautz

Phone

+49 221 4986 1474

Fax

+49 221 4986 1843

eMail

presse@deginvest.de