Aeon Microfinance (Cambodia) plans to expand its branches in Cambodia this year and also diversify its products from the current base after two years of operating in the Kingdom, officials with the company say.

Until now, the microfinance institution (MFI) – which is part of the same Japan-based conglomerate building a mega-mall next to the Sofitel in Phnom Penh – has provided financing for motorcycles, home appliances, computers and mobile phones.

Daisuke Maeda, managing director of Aeon, said last week that Cambodia is a high-growth market. Aeon says it has received a total of 50,000 applications for loan instalments since starting up in December 2011 and now gets about 3,500 new applications every month.

The outstanding loan portfolio was about $2.2 million at the end of 2012, and increased almost five-fold to $10.9 million by the end of 2013.

“Our business expansion in Cambodia is quite successful and this year we expect our sales [to reach] $24 million, which will increase 163 per cent from 2013,” Maeda said, adding that as the company is focusing on mobile phones, electric appliances and motorbikes, demand from younger applicants has increased.

At the same time, Aeon is heading in new directions.

“This year we would like to expand the agriculture equipment as now we provide the instalment service for agricultural equipment such as cultivator or big tractor,” Maeda said.

He added that Aeon’s other new service is the personal loan. Since March, the firm has been allowing customers to apply for cash loans without putting up any collateral at interest rates of 2.7 per cent to 2.9 per cent per month.

Aeon Cambodia has more than 1,000 merchants using the service; almost all are electrical appliance, mobile phone or motorbike shops in Phnom Penh or Siem Reap. The firm has also said it’s planning to extend its service coverage to other provinces soon.

Vong Chhoung, the owner of Lucky Motorbike Shop on Sihanouk Boulevard in Phnom Penh, said that buying instalment services via Aeon significantly helped her business last year, with about 30 customers coming in to buy a new motorbike using an Aeon loan.

She said that her popular motorbikes cost less than $1,000 each – suitable for her buyers, the majority of whom work in garment factories, hotels, restaurants or other private firms where they earn between $150 and $200 per month.

“It is the big help to increase our sales via this instalment service which is provided by this MFI to make the customers who have low income have more ability to buy,” Chhoung said.

Nhim Tola, 26, who owns a phone shop in Phnom Penh, said he applied to buy a motorbike via the service last week. He earns around $200 per month and wants to buy a Scoopy model that costs $680. Under the terms of the loan, he will pay $48 per month at an interest rate of 2 per cent until the debt is paid off.

“Of course, we do know that we have to pay them the interest fee; however, I think the instalment service is still good for me because I still have money to buy some other products for sale in my shop and can earn much more than what I will pay for the interest of my bike instalment,” he said.

In a Bangkok Post report last week, Yasuhiko Kondo, managing director of Aeon Thana Sinsap (Thailand), which oversees microfinance and leasing businesses in Cambodia, Myanmar and Laos, described Aeon Cambodia as a high-growth market.