International Finance Corporation (IFC), a member of the World Bank Group, has supported the first-ever Riel bond issuance, thanks to its optimism about Cambodia's development in banking and financial sector.
To take part in the support, IFC has invested in purchasing 800,000 bonds (about US$20 million) from the third largest microfinance lender on the Cambodia Securities Exchange (CSX) in Cambodia called Hattha Kaksekar Limited (HKL) that has issued 1.2 million bonds worth 120 billion Riels (US$ 30 million), in order to help create a domestic corporate bond market and allows HKL to expand its local currency lending to micro and small businesses, including farmers and women entrepreneurs, said IFC's press release AKP received yesterday.
This country's first-ever bond issuance is a milestone in the development of Cambodia's debt capital markets and a sign of confidence in the country's banking and financial sector, said Kyle Kelhofer, IFC Country Manager for Cambodia, Lao PDR and Vietnam. IFC is pleased to participate as an anchor investor in this issuance and we will continue working with key stakeholders and market participants to establish the debt capital market in Cambodia, helping mobilize funding to fuel economic growth, job creation and shared prosperity.
IFC investment was supported by the International Development Association (IDA)'s Private Sector Window, a new initiative to catalyze private sector investment and create jobs in the IDA countries. The facility enabled IFC to provide medium-term, local currency funding at a local market rate to allow HKL to provide affordable loans to rural borrowers. This will not only expand local currency access for farmers and small business owners, it also sends a confident signal to help Cambodia develop local currency funding over the long-term.
For his part, HKL's President and CEO Mr. Hout Ieng Tong said that the listing has given HKL greater ability to expand its Riel lending to rural microfinance, small and medium enterprises (SMEs), including women entrepreneurs, and to upgrade to new technology in our operations for the convenience of its customers, adding that HKL will be able to help them reach their full potential and deliver greater prosperity to rural communities, and at the same time grow their own business.
Source: Agency Kampuchea Press