Phnom Penh, 16 December 2004 — Cambodia Entrepreneur Building (CEB), a microfinance institution that lends primarily to women, signed a loan and equity agreement today that will significantly increase the number of borrowers CEB can help. CEB’s new financing, worth $750,000, is with ShoreCap International, a US-based institution that finances microcredit in developing countries. With this financing, over the next year, CEB will increase the number of borrowers its serves from 8,300 to an estimated 12,000.
In her speech at the ceremony, H.E. Madam Tal Nay Im, Director General for the National Bank of Cambodia (NBC), congratulated CEB on its success. “Getting financing from an international finance institution like ShoreCap is a very strong endorsement for CEB.” Her Excellency also noted that the government endorses MFIs as part of its poverty reduction strategy and MFIs are particularly well developed in Cambodia with around 100 MFIs at work, of which NBC has licensed 10 and registered 27. “The activity of registered and licensed MFIs is growing strongly. Over the first nine months of 2004 loans rose by 27%. Across Cambodia there are currently some 300,000 MFI borrowers.”
Mr. Bun Mony, CEB’s General Manager, said in his speech that CEB has both a strong commitment to serve the poor and also to run a self-supporting business that meets the demands of the market. CEB targets women for several reasons. “Women play important roles in providing for their families and they are very good at operating businesses. They are also very responsible and have a high loan repayment rate.”
Mr. Davis Golding, Executive Vice President and Chief Investment Officer for ShoreCap International Ltd. explained why his institution has taken a 43% share in CEB and provided a loan as well. “CEB is an excellent fit for us. First, CEB’s mission to finance entrepreneurs and enable them to improve their businesses and their lives, is at the heart of why ShoreCap was established. Second, the management and staff of CEB are very professional and we find the entrepreneurial spirit and attitude within the company to be an excellent example of how all microfinance institutions should be run.”
Mr. Jacco Minnaar, a representative from the International Finance Corporation’s Mekong Private Sector Development Facility, which helped broker the deal between ShoreCap and CEB and provides technical assistance and training to MFIs and banks, listed the benefits of MFIs. “MFIs provide loans at a rate that is much lower than what local money lenders offer, thereby increasing access to finance for poorer people. Microfinance not only allows the entrepreneurial poor to take advantage of economic opportunities, it also helps them to deal with crises and transform from “planning for survival” to “planning for the future”.
“MFIs play a crucial role in poverty alleviation through helping micro and small enterprises get started and grow. They also help private enterprise develop by efficiently allocating capital to businesses that will make the best use of it. At the same time, loan officers are a sounding board for entrepreneurs and the interaction between them allows entrepreneurs to improve or better think through their business plans. MFIs also allow women to improve their status. This is especially true for CEB, since they primarily serve women.”
