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German support helps microfinance institution thrive

Bun Mony, CEO of Sathapana Limited
Bun Mony, CEO of Sathapana Limited. Moeun Nhean

German support helps microfinance institution thrive

In August 2013, German investment and development company DEG, a subsidiary of German development bank KfW, decided to invest in Sathapana Limited with a $15 million loan, helping make the fast-growing microfinance institution one of the leading financial service providers in the Kingdom.

In an interview at his office at the company’s headquarters, Bun Mony, CEO of Sathapana Limited, recalled: “When DEG decided to provide a senior loan of $15 million to Sathapana, at the time, its loan portfolio was only $150 million, total assets totalled $171 million and public deposits were $66 million.”

Just a year later, the assistance has proved fruitful.

In August this year, Sathapana’s loan portfolio, total assets and deposits had increased to $240 million, $299 million and $140 million, respectively.

“With our financial support and technical expertise from German consultants, in just one year, Sathapana’s loan portfolio grew 60 per cent, total assets grew 75 per cent and public deposits more than doubled,” Mony said.

“In our experience, we found that while the German investment company trusted us, it’s our reputation as an institution of trust that made them want to financially support us and work with us,” he added. “Of course, many big international financial institutes have followed DEG.”

“The German investment is a very strong commitment. Not only does DEG offer financial support, but they monitor us and offer specialised advice,” Mony said. “DEG is the right partner for developing and growing our business.”

Sathapana Limited was established as an NGO in 1995 under the name Cambodia Community Building (CCB) to offer financial and health education services to poor communities.

“In 1997, the German NGO GTZ, since renamed GIZ, supported CCB as it grew into one of the first financial institutions to offer microfinancing in Kampong Thom province, Siem Reap province and Phnom Penh, with a total portfolio of approximately $300,000,” he said.

After financial grants expired in late 1999, CCB adopted a minimalist microfinance approach, focusing purely on credit loans and saving services.

CCB registered with the National Bank of Cambodia (NBC) as a microfinance operator in 2000, then in February 2003 it transformed itself into a profit-oriented company registered with the Ministry of Commerce under the new name Cambodian Entrepreneur Building Limited. During this period, GTZ played a vital role in partnering with the Mekong Project Development Facility to make the transformation a success.

In April 2003, CEP was licensed as a microfinance institution by the NBC. The name of company was changed to Sathapana Limited and it adopted the Reachasey – the king of animals – as its logo in 2008. A year later, Sathapana Limited became the first MFI to obtain a licence to accept deposits.

Mony explained that as the demands for the company grew, it reached out for direct investment. In 2012, it found it in the form of the Maruhan Japan Bank, which purchased a majority stake, and then an important lifeline came a year later.

“DEG provided great support that allowed Sathapana to grow to become the large and leading MFI that it is today – one that benefits many poor people across the country,” Mony said.

“Through the cooperation between DEG and Sathapana, we have reduced poverty and helped in the development of the Cambodian economy.”

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