Cambodia's booming microfinance sector continues to attract international investors, with a South Korean financial institution the latest to buy out one of the Kingdom’s myriad microlenders.

The Seoul-based Welcome Financial Group (WFG) announced on Friday that it had acquired the full shareholding of Green Central Microfinance Ltd for an undisclosed sum, and rebranded it Welcome Finance (Cambodia).

The rebranded microfinance institution (MFI) launched operations on Friday.

Lee Sang-kook, chief executive officer of Welcome Finance (Cambodia), said the acquisition was part of his company’s strategy to capture growth opportunities in Cambodia where the financial sector is enjoying high growth.

He said the deal was completed earlier this year and received approval from the National Bank of Cambodia (NBC) in April. He said Welcome Financial Group purchased the MFI with the aim of developing Cambodia’s financial services market, and would look to expand its operations in order to serve more customers.

“We will increase the investment capital to expand our operation areas in order to provide more financial services to satisfy our customers’ needs,” he said.

Green Central received its operating licence in 2008 and has five branches in and around Phnom Penh.

Its total assets reached $8.9 million at the end of 2015, with net profit of $569,784 last year, according to central bank’s latest annual report.

As of the end of June, the microlender had $7.73 million in loans outstanding, according to the Cambodian Microfinance Association (CMA).

Mergers and acquisitions of the Kingdom’s MFIs have become common as foreign financial institutions, many facing slow growth prospects at home, seek to tap into Cambodia’s rapidly growing credit market.

In 2014, South Korea-based Woori Bank purchased local MFI Malis Finance for $4.9 million. This year, Thailand-based Bank of Ayudhya finalised an agreement to acquire Hattha Kaksekar Ltd (HKL), Cambodia’s fourth-biggest MFI, in a deal believed to be worth more than $140 million.

CMA president Hout Ieng Tong, who is also the president and CEO of HKL, welcomed South Korea’s latest investment in the Kingdom’s microfinance sector. He said the launch of Welcome Finance (Cambodia) would add another solidly backed player to the local market, and the MFI would benefit from the superior technological capacity of its new parent company.

This should improve convenience and service quality for customers.

“The competition in the industry is getting tougher, requiring players to upgrade skills and build strong confidence among their customers,” he said.

According CMA’s half-year report, 47 MFIs plus seven NGOs posted outstanding loan values at $3.26 billion during the first six months of 2016, an increase of 34 per cent compared with the same period a year earlier.

Meanwhile, total deposits increased to $1.75 billion as of end-June, compared to $1.12 billion a year earlier for Kingdom’s eight licensed microfinance deposit-taking institutions.