LOLC bullish in microfinancing
View(s):Having inked a joint venture with Pak Oman Microfinance Bank Ltd of Pakistan, the LOLC Group last week acquired a majority interest in PRASAC Microfinance Institution Ltd (PRASAC) which aims to diversify its business and transform into a licensed commercial bank in the near future.
The company is also considering going to Indonesia next year with a similar acquisition but no details were immediately available. LOLC also has microfinance businesses in Sri Lanka and Myanmar.
The PRASAC stake was acquired from Belgian Investment Company for Developing Countries SA (BIO), Dragon Capital Group Limited (Dragon Capital) and NederlandseFinancierings-Maatschappijvoor Ontwikkelingslanden N.V. (FMO). They aim to expand to Vietnam as well in the medium term, officials said.
Under the new ownership structure, the LOLC Group’s stake in PRASAC increased to 70 per cent. LOLC’s maiden international investment, PRASAC Microfinance Institution, is currently Cambodia’s largest microfinance institution, providing access to financial services to rural communities.
As a Cambodia-incorporated financial institution, PRASAC has evolved significantly since its inception in 1995 as a credit provider involved in financing to rehabilitate the agricultural sector in rural Cambodia.
Ishara Nanayakkara, Deputy Chairman of the LOLC Group was quoted in a company media release as saying, “We saw great potential in PRASAC from the outset, and it was therefore LOLC Group’s maiden overseas investment.
We would like to convey our appreciation to the outgoing shareholders for their contribution and look forward to working closely with BEA and the PRASAC management in fulfilling the shared goal of elevating and empowering micro entrepreneurs to create a sustainable, inclusive economy in Cambodia.” Sim Senacheert, CEO of PRASAC was quoted in the same statement as saying, “We would like to express our gratitude towards BIO, Dragon Capital and FMO for their strong support over the past 10 years and look forward to a renewed partnership with our existing shareholder LOLC and strategic investor BEA to further contribute to sustainable economic development and financial inclusion in Cambodia.”