Prasac Microfinance Institution Ltd (Prasac) received approval from the National Bank of Cambodia (NBC) to sell a 70 per cent stake to Seoul-headquartered KB Kookmin Bank (KB) on January 29, Prasac president and CEO Sim Senacheert said on Sunday.

The move will pave the way for Prasac to upgrade its technology and provide customers with more sophisticated products and services, he told The Post.

KB announced late in December that it had decided to buy the 70 per cent stake in the microfinance deposit-taking institution (MDI), which it will purchase from Sri Lankan-based LOLC Holdings Plc for $603.4 million.

Senacheert said: “The transaction has not been completed yet, as KB is still awaiting approval from Korean authorities, which we expect they will receive soon.”

He said KB’s investment is a positive sign that confidence among foreign investors in Cambodia and Prasac is on the rise.

“We haven’t discussed the plan in further detail yet. We will discuss future plans soon after we receive approval from all relevant authorities and we will disclose details in due course,” he said.

The deal with KB, Senacheert said, will reel in more capital and provide a source of funding at lower costs.

According to The Korea Herald, KB will close the deal within three months, which is expected to allow it to consolidate its consumer banking network in the Kingdom. Operating six branches in Cambodia, KB earned pre-approval in the Kingdom for the acquisition in May last year.

KB said it plans to buy the remaining 30 per cent stake in Prasac two years after the transaction and finalise the acquisition, local Korean-language News Briefing Cambodia reported.

As of December, Prasac’s total assets amounted to $3.11 billion. Outstanding loans amounted to $2.51 billion while total deposits reached $1.78 billion.

By last year’s end, it had installed 135 ATMs, 509 point of sale (POS) terminals and had amassed 16,118 mobile banking users.