Phnom Penh, Cambodia, June 7, 2019—IFC,
a member of the World Bank Group, is supporting PPCBank to scale up its
lending capacity to small and medium enterprises (SMEs) in Cambodia through
financing and advisory services. This will help close the financing gap
for businesses, boosting growth and creating jobs.
Over the past two decades, Cambodia has undergone a significant transition,
sustaining an average growth rate of 7.7 percent between 1995 and 2018.
While micro, small, and medium enterprises (MSMEs), including women-owned
ones have played a significant role in the economy, around 66 percent of
them identify access to finance as a major obstacle. According to the IFC
MSME Finance Gap Report (2017), the unmet financing demand of MSMEs in
Cambodia is estimated to be $3.7 billion.
IFC will help address this challenge through providing a risk-sharing facility
to PPCBank, the tenth largest commercial bank in Cambodia. Under this facility,
IFC and PPCBank will each cover 50 percent of the risk on an eligible SME
portfolio of up to $30 million. Over the next five years, PPCBank expects
to extend about 5,500 loans worth $520 million to very small and small
and medium enterprises, including women-owned ones.
“We have been working on several projects to develop products and services
for SMEs and for women in Cambodia. Partnering up with IFC in a risk sharing
facility and banking advisory for SMEs allows us to scale up lending to
the underserved part of Cambodian population on better terms,” said Chang
Moo SHIN, PPCBank President. “We are thrilled to contribute with bigger
significance to financial inclusion through the partnership with IFC.”
The risk-sharing facility is a risk-mitigation tool under the IFC’s Small
Loan Guarantee Program (SLGP) designed to increase financial institutions’
appetite to finance SMEs, including women-owned SMEs. This global program
focuses on frontier markets, where lending is constrained by informality,
high collateral requirements, and risk aversion. SLGP is supported by the
International Development Association’s Private Sector Window, which helps
catalyze investment in lower-income countries.
In addition, in partnership with the United Kingdom Department for International
Development (DFID) and the Netherlands Ministry of Foreign Affairs, IFC
will advise PPCBank on the use of the risk-sharing facility and enhance
PPCBank’s capacity to scale up financing to SMEs, including women-owned
SMEs. The bank identifies SMEs as a new strategic segment and plans to
broaden its client outreach through gender and digital finance.
“SMEs drive growth and employment in lower-income economies, but they
struggle to attract financing because of their size, limited experience,
and other factors. This risk-sharing facility will help PPCBank serve the
needs of this segment that is so critical to Cambodia’s economy and demonstrate
the ‘bankability’ of this client segment to other market players,” said
Vivek Pathak, IFC Regional Director for East Asia and the Pacific.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In fiscal year 2018, we delivered more
than $23 billion in long-term financing for developing countries, leveraging
the power of the private sector to end extreme poverty and boost shared
prosperity. For more information, visit www.ifc.org
Locally incorporated in September 2008 the Republic of Korea-owned PPCBank
currently operates throughout 19 branches and 29 ATMs across Phnom Penh
and major provinces of Cambodia. With its vision, “Success Story Creation
Based on Localization and Advanced Model in Southeast Asia”, PPCBank commits
to providing Omni channel experiences for its customers and non-customers.
Ranging from social-thinking branches with coffee shops served by people
with special needs in their locations, easy-banking Mobile App for individual
customers to smartBiz, a corporate management system for corporate customers
to bank and manage their payment collection more effectively with Virtual
Account, PPCBank also provides Mobile Teller for onsite consultation within
and out of the branch. PPCBank actively participates in financial inclusion
campaign, run by the National Bank of Cambodia in cooperation with the
Ministry of Education, Youth and Sport. For more information, visit