Khmer Specialized Bank officially launched operations on Wednesday, becoming number 13 in a market that the analysts believe is already crowded.

Converted from the microfinance institution Angkor ACE Star Credit Limited, the bank graduated into specialised status after it was infused with $21 million by the lender's main shareholder, Cao Yunde.

Sophal Sophat, head of the marketing department, said the bank will initially target lending services before it eventually seeks a commercial bank license.

Despite Khmer Specialized Bank being new to the market, it has enough funding to provide competitive interest rates between 8 to 12 per cent, he said.

“We have a lot of capital, so we can provide loans to big customers,” he said. “Some specialised banks lack adequate investment; therefore we have a chance to strengthen our position in the market.”

Cao Yunde, Chairman of the Board of Directors of Khmer Holding Group Co, which owns Khmer Specialized Bank, predicts that the bank has the potential to become a full-fledged commercial bank in the next three to five years. Yunde originally purchased 90 per cent of Angkor ACE Star Credit Limited in 2014.

Bun Mony, CEO of the newly-formed Sathapana Bank Plc, which early this year finalised a merger between the Maruhan Japan Bank Plc and Sathapana Ltd, explained that as a specialised bank, it can only deliver limited products to potential customers.

“It is natural that lending institutions want to grow, but moving from microfinance to specialised bank, I do not see much difference. As a specialised bank, they can only do one out of the three bank products allowed by the National Bank of Cambodia.”

“They can issue loans, collect deposits or handle remittances,” he said, adding that it was up to the shareholders to choose a successful course.