Logo of Phnom Penh Post newspaper Phnom Penh Post - Upbeat OPIC eyes Kingdom firms for future investment

Upbeat OPIC eyes Kingdom firms for future investment

A motorcycle passes in front of an Acleda bank branch in Phnom Penh.
A motorcycle passes in front of an Acleda bank branch in Phnom Penh. Hong Menea

Upbeat OPIC eyes Kingdom firms for future investment

The Overseas Private Investment Corporation (OPIC) is “optimistic” about its recent investments in Cambodia’s financial sector, a representative said yesterday, adding that the US government’s development finance agency hopes to eventually direct some of its lending facilities to local SMEs.

Geoffrey Tan, Asia-Pacific regional representative of OPIC, told an AmCham breakfast briefing that OPIC has earmarked $4 billion in finance capital for Asia, though its existing investments in Southeast Asia remain low by comparison to those in Africa and Latin America. He said the loan facilities that the agency provides help to provide economic growth and “long-term stability structure”.

“If our investments don’t work, the developmental effects we want to see won’t happen,” he said.

He added, however, that OPIC had a solid track record and very few of its investments had ever failed.

Founded in 1971, OPIC is a US government agency “that helps American businesses invest in emerging markets”. The agency provides loans – no smaller than $500,000, and usually calculated in the millions – to well-estaalished private sector companies in these markets.

Since 2013, OPIC has committed over $200 million in finance to six companies in Cambodia, mostly financial institutions, according to data on its website.

Among the recent investments is a $5 million long-term loan facility to local microfinance institution (MFI) Thanakea Phum (Cambodia) Ltd aimed at supporting the disbursement of home improvement loans to low-income Cambodians.

The MFI, majority owned by a fund managed by US-based DWM Asset Management, has since become one of OPIC’s most successful investments in the region, according to Tan.

Meanwhile, he said that he was “optimistic” about OPIC’s investments in Cambodia, especially its cooperation with the Kingdom’s biggest financial institution, Acleda Bank.

OPIC announced last year that it would provide $125 million over seven years to Acleda Bank to support lending to small and medium enterprises (SMEs).

It has also provided $30 million to the bank as part of a joint initiative by Goldman Sachs and the International Finance Corporation (IFC) to support local women entrepreneurs.

While OPIC announced in 2015 that it was interested in supporting Cambodian SMEs directly, Tan said the transition to SME finance would need more time.

“We’re not well-suited to back small start-ups or commercial activity,” Tan said. “It’s quite restrictive. We would like to see this shift.”

MOST VIEWED

  • Massive stingrays may live in Mekong’s deep pools

    US scientists have suggested that unexplored deep pools in the Mekong River in an area of Stung Treng could potentially be home to significant populations of giant freshwater stingrays, one of the world’s largest freshwater fish species. This comes as a fisherman hooked a 180

  • PM takes time to meet, greet Cambodians living in the US

    After landing in the US ahead of the ASEAN-US Special Summit, Prime Minister Hun Sen was received by over 1,000 Cambodian-Americans including political analysts who welcomed him with greetings, fist bumps and selfies. Hun Sen also met with analyst Mak Hoeun, who had allegedly spoken ill

  • PM reflects on shoe throwing: Free speech or act of violence?

    Prime Minister Hun Sen on May 17 questioned whether a man who threw a shoe at him while he was in the US was exercising freedom of expression or if it was an act of hostility. Hun Sen was referring to an incident last week when

  • Chinese tourists 2.0 – Coming anytime soon?

    Regional tourism is grappling with the absence of the prolific travellers and big spenders – the Chinese tourists. Cambodia, which has welcomed over two million Chinese tourists before Covid-19, is reeling from the economic loss despite being the first to fully open last November ‘To put

  • Prime Minister Hun Sen warmly welcomed by president Biden

    Prime Minister Hun Sen, as ASEAN chair, and other ASEAN leaders were warmly welcomed by US president Joe Biden as the ASEAN-US summit May 12-13 kicked off today in Washington. “This evening, I welcomed ASEAN leaders to the White House for the first time in

  • Third Makro outlet planned for capital’s Chroy Changvar

    Makro (Cambodia) Co Ltd is set to invest $12.7 million in its third Cambodian outlet, this time in northeast Phnom Penh’s Chroy Changvar district, an area dotted with high-end residential developments, as shopping behaviours continue to evolve in tandem with economic growth. The Cambodian Investment