Korean Bank Acquires Local Microfinance Firm
NH Nonghyup, a South Korean bank, was granted permission from the Cambodian central bank and the Department of Commerce to take over SAMIC, a local microfinance company, and will begin full-scale operations next month.
The Korean bank announced it received final approval on August 22 and decided to rename the local company as Nonghyup Finance Cambodia. A launching ceremony is planned for September 11, according to The Korea Times.
SAMIC, the acquired small lender with total assets of $15.4 million and total capital of $5.3 million, is headquartered in Phnom Penh and operates 18 branches in small and medium Cambodian cities.
“Nonghyup Finance Cambodia plans to expand its network based on three major cities: Phnom Penh, Sihanoukville, and Siem Reap,” The Korea Times reported. “It will actively expand loans for real estate mortgages and SMEs, as well as provide financing for agricultural equipment,” the report added.
An official from NH Nonghyup Bank stated, “We will explore collaboration models with the local Ministry of Agriculture and implement a differentiated marketing strategy leveraging the bank’s expertise.”
Nonghyup Financial is a subsidiary of South Korea’s National Agricultural Cooperative Federation, commonly known as the Nonghyup Group.
So Phonnary, vice-president of Acleda Bank, welcomed Nonghyup’s entry into the Cambodian financial market, noting that it fosters healthy competition. “All competition is good for the sector, as long as it is fair and ethical,” she said.
“More banks mean more choices for customers. Each player in the market has its own niche. Nonghyup Financial, for instance, specializes in real estate. Every new entrant brings a new level of service that compels other companies in the industry to adapt,” Ms. Phonnary added.
With the acquisition of the Cambodian company, NH Nonghyup Bank now operates six subsidiaries abroad. In addition to its Cambodian subsidiary, the bank has one branch in New York and Hanoi, a micro-loan corporation in Myanmar, and offices in Beijing and New Delhi.