A new specialized bank aimed at helping Cambodian farmers obtain loans and backed by Hong Kong-based securities firm Chief Group opened Sunday at Canadia Tower.
Chief (Cambodia) Specialized Bank PLC will at first focus on offering loans to the country’s rural farmers, but has plans to become a full-service commercial bank focusing on corporate loans and micro-finance, according to its managing director, Loke Wai Ming.
“We have a unique business model, and we believe this is the first step,” he said, referring to its focus on Cambodian farmers. “The true Cambodia is not in Phnom Penh, it’s in the provinces. We will help the agricultural business grow.”
Mr. Loke on Sunday welcomed a crowd of about 100 local and foreign banking executives to the bank’s offices in Phnom Penh, and said the bank is the “first of many more companies” Chief Group plans to open in Cambodia.
In May, Chief Group established Chief Cambodia Holdings Ltd., a subsidiary tasked with overseeing five investments: Chief (Cambodia) Specialized Bank PLC, Chief Agriculture Group (Cambodia) Ltd., Chief Resources Group (Cambodia) Ltd., Chief Cambodia Infrastructure Fund and Chief Real Estate Group (Cambodia) Ltd.
The group’s investment in Cambodia appears to be its first outside of Hong Kong and China.
Chief’s entrance makes it the eighth specialized bank in the country, according to the National Bank of Cambodia.
The bank’s focus on farmers appears to stem from its parent company’s initiative to increase the export of Cambodian jasmine rice.
A brochure provided to attendees Sunday about Chief Group’s current agricultural interest in Cambodia highlights the company’s focus on rice.
“We cooperate with the local rice farmers directly to improve the quality and the yield of the Cambodian rice plantations,” it says.
Industry executives on Sunday said that while Cambodia’s commercial banking sector is currently overcrowded because of the small addressable client population, specialized banks still have opportunities to expand.
“I think evidence would suggest there is still plenty of room for a bank focused on lending to small-scale farmers, especially if they are willing to do so on an uncollateralized basis. This is still the most significant area of financing gap in Cambodia,” ANZ Royal CEO Grant Knuckey said, adding that he sees Chief’s services taking aim at microfinance institutions (MFIs) and not commercial banks.
“Given Chief’s explicit focus on small farmers, they are really operating in the same client base as MFIs, not commercial banks,” he said.
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