​Swedfund supports entrepreneurship in Cambodia

Swedfund invests MUSD 5 through a loan in Acleda Bank, a bank with strong focus on social and economic development. The loan enables the Bank's continued expansion in rural areas and thus contributes to increased employment and development of domestic production.

Acleda Bank was established in 1993 by the International Labour Organisation (ILO) and the UN Development Programme (UNDP) as a local microfinance NGO, to provide financing to micro-, small- and medium-sized enterprises. The organisation was privatised in 2000 and became a fully operational commercial bank in 2003.

Today Acleda is the largest bank in Cambodia, and holds a market share of approximately 20%. It has been a pioneer in developing products and services to the SME segment (small and medium-sized enterprises), which forms the bulk of the customers. The well-developed range of services, nationwide branch network, extensive organisation and leading IT-based banking services enable the bank to reach out to the country's essential small and medium-sized businesses. There is one million SMEs in Cambodia, which are estimated to generate 75% of the total job opportunities.

Only 10% of the Cambodian population has access to financial services in the formal system. Acleda has a stated ambition to contribute to the country’s economic and social development by providing financial services to local entrepreneurs, where the majority of the borrowers are women. The Bank's policies and lending methodology emphasise the importance of providing adequate information to borrowers, allowing transparent pricing and counteract over-indebtedness.

"This investment will enable Acleda to expand in the rural areas of Cambodia and further support local entrepreneurship, thereby stimulating job creation and sustainable development," says Anna Ryott, MD of Swedfund.

The financing for banks in Cambodia is limited, in particular long-term debt, which is why long-term investors as Development Finance Institutions have an important role to play. Swedfund's investment of MUSD 5 is part of a syndicated loan led by the Dutch Development Bank FMO. The loan will enable the Bank to continue its expansion in Cambodia's rural areas and thus contribute to increased employment and development of domestic production.