Acleda Bank Plc

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Acleda Bank PLC is the only MFI in Cambodia with a banking structure. BIO’s financing supports Acleda in further growing its portfolio and strengthening its Tier II capital.

Acleda was established in 1993 as an NGO for micro and small enterprise development and credit by ILO and UNDP. In order to ensure sustainability, the institution transformed into a public limited company and in 2003 was granted a banking license to operate as the first microfinance bank in Cambodia under the name of ACLEDA Bank Plc. Today ACLEDA is the only MFI in the country operating as a bank. As a bank, ACLEDA offers a large array of both credit and savings products. ACLEDA is a public limited company with a head office located in Phnom Penh with 234 offices across Cambodia. The bank has 7,146 employees, a loan portfolio of USD 1.1 billion and 272,316 active borrowers.

Supporting the expansion plans of ACLEDA will have a positive development impact. More specifically, the project significantly contributes to: 1) the deepening and professionalization of an underdeveloped local financial sector, 2) the growth of a commercial bank with a regional footprint managed in a professional way, 3) the significant increase in the quantity and quality of the banking products offered to the local population and the micro, small and medium businesses, and the 4) creation of assets and jobs.

As the economic perspective, worthwhile highlighting that ACLEDA plays a very important role as financial intermediary by encouraging deposit mobilization, which is the main local source of funds, and re-lending the funds to those businesses and individuals who need to set up and expand their businesses through its largest branch network within 24 provinces and municipality in Cambodia.

Furthermore, ACLEDA also plays a crucial role in settlement and cash management for both local and international businesses and individuals, for example, money transfer, payroll services, cash payment, cash collection, trade finance, etc. In the long run and in a very sustainable manner, ACLEDA continues to play a role as the universal bank for the people with the introduction of new products and services meeting the needs of the ordinary customers including the middle class

Overall in Cambodia microfinance has been expanding to excluded people in more remote areas and specifically women. Approximately 80% of microfinance clients live in rural areas and 81% of clients are women with the repayment rate from clients almost up to 98%. Local MFIs have been shown to empower women as the head of the family who often have good cash management skills. Research (Central Bank of Cambodia) has estimated that the provision of financial services has impacted 3,878,618 Cambodian people (average of 4.7 people per household). Areas of investment have included businesses sectors such as agriculture, small and medium retailers, handicrafts, services, construction, transportation among others. This seems to support the theory of economic development that argues that people can be moved out of poverty through empowerment as business owners. This has led microfinance to be described as "the key to breaking the poverty cycle".

ACLEDA complies with the relevant environmental laws and regulations applicable in Cambodia.

ACLEDA has an environmental and social management system (“ESMS”) in place. Within the scope of the environmental and social commitment of the bank, ACLEDA deploys two full time Environmental Officers who regularly undertake training and refreshers courses to coordinate ACLEDA’s environmental activities and monitor performance. The social and environmental assessments are well integrated within the credit processes.

In terms of following the Client Protection Principles, the bank will conduct a dedicated program and will be an active participant and supporter of the Transparency in Sustainability and Finance (“TSF”) initiative led by Triodos Bank. ACLEDA is clearly committed to adhering to the Client Protection Principles as both shareholders and lenders have a social focus.

Development impacts:

  • Local economic growth: growth of a commercial bank with a regional footprint managed in a professional way
  • Private sector consolidation/innovation: deepening and professionalization of an underdeveloped local financial sector
  • Financial inclusion: significant increase in the quantity and quality of the banking products offered to the local population and the micro, small and medium businesses

Website: www.acledabank.com.kh

For more information on Transparency in Sustainability and Finance by Triodos: www.triodosfacet.nl

  • Investment amount (€):

    € 7.25 M

  • Contract signature :

    2013

  • Nature of intervention :

    Debt

  • Development impacts :

    • 1 — Local economic growth
    • 2 — Private sector consolidation/innovation
    • 3 — Financial inclusion