Sustainability of commercial microfinance institutions in Kampong Thom Province, Cambodia | |
| Author | Seng Youraden |
| Call Number | AIT Thesis no.RD-07-03 |
| Subject(s) | Microfinance--Cambodia--Kampong Thom Financial institutions--Cambodia--Kampong Thom |
| Note | A thesis submitted in partial fulfillment of the requirements for the degree of Master of Science in Regional and Rural Development Planning |
| Publisher | Asian Institute of Technology |
| Abstract | In the early stage, microfinance had been more a social nature of its services, which had been operated alike the form of humanitarian agencies. However, the current focus is turning to sustain the institution by self-generating the incomes and providing the services. This was due to the shrinking funding resources supported by the donors and the ever increasing demands of the working poor. Thus, the research was mainly aimed at assessing the sustainability of three commercial microfinance institutions in providing the financial services to the rural people in Cambodia. Three main aspects, such as operational sustainability, financial sustainability, and clients' and lenders' opinions, were analyzed to identify the factor contributing to the sustainability thereby the recommendations were drawn to suggest for improvement of the MFIs. The research was conducted with the three commercial (licensed) microfinance institutions, namely Vision Fund Cambodia (VFC), Cambodian Entrepreneur Building (CEB) and Hattha Kaksekar Limited (HKL), which were selected the provincial operation in the Kampong Thom province, Cambodia. The primary data was employed a structured interview to collect the information from provincial and head office staffs of the MFIs. Also, case study interview was a tool to obtain opinions from the borrowers of each MFIs. The secondary data was mainly focused on financial reports from the provincial office, which supplemented by operational and credit policies and reports. The research was essentially a quantitative analysis of operational and financial sustainability ratio, which supported by qualitative analysis. The main findings of the research indicated that the licensed microfinance institutions were profit oriented organizations, which operated mostly on individual loan to the viable clients. Also, they have vulnerable and short term vision of achieving the sustainability and growth because most of their lending portfolio was depended on the international loan and saving was not extensively mobilized from the public. In the view of operational sustainability, these MFIs were showing the continuous increase of the repayment rate, number of clients and amount of loan outstanding. These were due to the strict eligible criteria and the growing demand of loan. However, they tended not to have financial sustainability due to the high operational costs. Also, they limited their outreach to the central areas with small population thereby they could not optimize the efficient use of their resources. Another significant finding was that unavailability of potential business opportunity restricted the clients to access the loan from the MFIs. Lastly, a set of recommendation was suggested to the institutions in pursuit of enhancing their operational and financial performance towards the sustainability; so that, they can be destined for the long benefits of the rural people. |
| Year | 2007 |
| Type | Thesis |
| School | School of Environment, Resources, and Development (SERD) |
| Department | Department of Development and Sustainability (DDS) |
| Academic Program/FoS | Rural Development, Gender and Resources (RD) |
| Chairperson(s) | Thapa, Gopal Bahadur; |
| Examination Committee(s) | Soparth Pongquan;Kusakabe, Kyoko; |
| Scholarship Donor(s) | SWEDEN (Sida) |
| Degree | Thesis (M.Sc.) - Asian Institute of Technology, 2007 |