US-based asset manager MicroVest is lending USD 9 million for five years to Acleda Bank, a publicly traded firm that operates in three countries, to support Acleda’s provision of financial services to small and medium-sized enterprises (SMEs) in Cambodia, particularly those owned by women. The investment is part of a syndication for Acleda by the World Bank Group’s International Finance Corporation (IFC) that is to include up to USD 100 million each from IFC and a group of third-party partners. In support of the syndication, the Women Entrepreneurs Opportunity Facility, which was established by IFC and the US-based financial institution Goldman Sachs, is offering performance-based incentives totaling up to USD 550,000 if Acleda meets various goals for serving women-owned enterprises.
Acleda Bank evolved from an NGO established in 1993 to serve micro- and small enterprises in Cambodia. The organisation became a commercial bank in 2003 and as of 2022 its mission is to “provide micro, small and medium entrepreneurs with the wherewithal to manage their financial resources efficiently and by doing so to improve the quality of their lives.” The bank offers credit and deposits as well as cash management, fund transfers, trade finance, payment cards and other services to individuals as well as businesses online and via 263 branches in Cambodia.
Acleda Bank’s subsidiaries include Cambodia-based Acleda Institute of Business; Cambodia-based Acleda Securities; Acleda MFI Myanmar, a microfinance institution (MFI) offering loans and savings for microentrepreneurs via 17 branches in Myanmar; and Acleda Bank Lao, a financial institution with 38 branches in Laos. As of December 2021, the parent organisation reported USD 7.9 billion in assets, USD 5.7 billion in deposits, USD 5.4 billion in loans and advances, and one-year profits of USD 167 million.
Launched in 2004, MicroVest comprises a family of funds that invest in MFIs in emerging markets. It reported a gross loan portfolio of USD 519 million as of June 2021. MicroVest is a subsidiary of Development Alternatives Incorporated (DAI), a US-based international development firm focused on “fundamental social and economic development problems caused by inefficient markets, ineffective governance and instability.”
Founded in 1956, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in low- and middle-income countries. During the 12 months ending June 2021, the organisation disbursed investments totaling USD 31 billion, of which about one third was mobilised from partner institutions.
The World Bank Group is a multilateral organisation whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2022, it has 189 member nations. The group encompasses: (1) the International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During its 2021 fiscal year, the World Bank Group disbursed funds totaling USD 60 billion.
Goldman Sachs offers banking, investment management, financial advice and other services to corporations, governments and retail clients. Founded in 1869, the firm is headquartered in the city of New York and maintains offices in 39 countries. As of December 2021, it reported total assets of USD 1.5 trillion.
By Saulius Simonas Ramanauskas, Research Associate
Sources and Additional Sources
MicroVest press release
https://microvestfund.com/microvest-invests-9m-in-ifc-led-syndication-to-finance-women-led-smes-in-cambodia
IFC disclosure on the investment in Acleda
https://disclosures.ifc.org/project-detail/SII/44882/acleda-sr-2020
Acleda homepage
https://www.acledabank.com.kh
MicroVest homepage
https://microvestfund.com
DAI homepage
https://www.dai.com
IFC homepage
https://www.ifc.org
World Bank Group homepage
https://www.worldbank.org
Goldman Sachs homepage
https://www.goldmansachs.com
Previous MicroCapital brief on Acleda
https://www.microcapital.org/microcapital-brief-acleda-bank-cambodia-launches-unity-toanchet-digital-wallet
Previous MicroCapital brief on MicroVest and IFC
https://www.microcapital.org/microcapital-brief-microvest-capital-management-announces-close-of-60m-microvest-ii-a-microfinance-equity-fund
Previous MicroCapital brief on DAI
https://www.microcapital.org/microcapital-brief-microvest-loans-5m-to-banco-delta-to-boost-post-covid-economy-in-panama-via-financial-access-for-msmes
Previous MicroCapital brief on World Bank Group
https://www.microcapital.org/microcapital-brief-world-bank-groups-ibrd-lending-400m-to-industrial-development-bank-of-turkey-tskb-for-smes-women-inclusive-enterprises-businesses-serving-syrian-ref
Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.
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Source: microcapital.org
