Logo of Phnom Penh Post newspaper Phnom Penh Post - Prasac nominal capital up to $168M

Prasac nominal capital up to $168M

Content image - Phnom Penh Post
Prasac holds its annual workshop on Saturday. It has raised its registered capital from $110 million to $168 million, an amount five times larger than the National Bank of Cambodia’s requirement. PRASAC MFI

Prasac nominal capital up to $168M

Cambodia's largest microfinance institution Prasac has raised its registered capital from $110 million to $168 million, an amount five times larger than the National Bank of Cambodia’s (NBC) requirement.

A prakas by the NBC requires microfinance deposit-taking institutions (MDIs) like Prasac to maintain at least $30 million in registered capital.

Prasac Microfinance Institution Ltd senior vice-president Say Sony told The Post on Wednesday that Prasac’s proposal to increase its registered capital was approved by the NBC on December 31 and by the Ministry of Commerce on Tuesday.

Sony said the increase in registered capital proves that Prasac can grow its business in terms of quantity, quality and efficiency.

“We consider this a great milestone and a great start to 2019. The increase in registered capital shows shareholders our commitment to support the NBC’s objectives – to strengthen financial regulations and prudential requirements,” Sony said.

He said at the end of last year, Prasac’s assets totalled $2.37 billion. Its outstanding balance amounted to $1.96 billion while deposits totalled $1.29 billion.

At the end of last year, Prasac installed more than 126 ATMs, 498 points of sale systems and saw 11,200 registered mobile banking users.

On March 2016, the NBC issued a prakas, requiring financial institutions to raise their minimum capital to operate in the Kingdom.

It requires all commercial banks, including subsidiaries of foreign banks, to increase their minimum capital to the equivalent of $75 million.

Specialised banks are required to raise their minimum capital to $15 million from $7.5 million, while MDIs had to raise their minimum capital to $30 million from $2.5 million.

Cambodia Microfinance Association executive director Yun Sovanna said on Wednesday that the increase of Prasac’s registered capital is warranted given that the financial firm has grown rapidly.

He said once a financial institution grows through bigger loans and deposits, it begins to see risks. He said the firm’s decision to increase its capital far greater than the central bank’s requirements proves that is has a strong commitment to maintaining financial health and ensuring public confidence.

“When financial institutions grow, they always want to offer comprehensive financial services,” he said, adding that operators may view staying as an MDI or MFI might limit their ability to offer services.

“In general, MFIs and MDIs always have the ambition to transform themselves to a [bank] so they can offer comprehensive financial services.”

MOST VIEWED

  • Over 100 Chinese nationals to be deported for online scam

    The Ministry of Interior is planning to deport 128 Chinese nationals after they were arrested in Preah Sihanouk province on Wednesday for their alleged involvement in an online money extortion scam. Y Sokhy, the head of the Department of Counter-terrorism and Transnational Crime, told The Post

  • LPG gas explosion injures 13 people, including foreigners, in Siem Reap

    An explosion on Wednesday at a liquid petroleum gas (LPG) car and tuk-tuk refuelling station in Siem Reap city has left 13 people, including an American and a Briton, suffering burns. The seven most severely burned, including a provincial police officer, were sent to a Thai

  • The French mother navigating the capital in her own personal tuk-tuk

    French woman Cecile Dahome gracefully manoeuvres her tuk-tuk through the manic streets of Phnom Penh with the precision of a Japanese katana before a herd of motorcyclists, attempting to perform illegal U-turns, cuts her off. The riders, like baby ducklings following their mother’s tracks,

  • More than 800 people test positive for HIV in 2018

    The National Aids Authority (NAA) said more than 800 people tested positive for human immunodeficiency virus (HIV) last year, joining over 76,000 others aged between 15 and 49 in the Kingdom already infected with the virus. The spread of HIV/AIDS in the Kingdom is showing few signs of