MICROCAPITAL BRIEF: LOLC Cambodia borrows $7 million from the Nordic Microfinance Initiative to expand financial access in rural Cambodia

The Norway-based Nordic Microfinance Initiative (NMI) recently announced a $7 million subordinated loan to Lanka Orix Leasing Company (LOLC) Cambodia, a member of the Sri Lanka-based LOLC Group, to expand lending and credit services -lease to low-income people who live in rural areas. The agreement follows Reimbursement by LOLC Cambodia of a senior loan that NMI paid to the microbank in 2018.

LOLC Group is a unit of Orix Corporation, a financial services provider founded in 1964 and based in Tokyo, Japan. Orix is ​​active in retail banking, leasing, life insurance, securities brokerage, venture capital and real estate finance and development. The company is present in Asia, Africa and North America. For the year ending March 2022, it generated revenue of 2.5 trillion yen ($18 billion) on assets totaling 14 trillion yen ($107 billion).

The LOLC Group is present in a range of industries in Cambodia, Myanmar, Pakistan and Sri Lanka. As of March 2021, the company had a one-year return on equity of 24% and total assets of LKR 874 billion ($2.4 billion).

LOLC Cambodia was founded in 1994 as Thaneakea Phum (Cambodia) by the American NGO Catholic Relief Services. It has since transformed into a for-profit institution that offers savings, credit, insurance and mobile banking services. As of March 2022, LOLC Cambodia reported total assets of USD 1.3 billion. Most of her clients are women who live in rural areas.

NMI was founded in 2008 with the goal of creating jobs and wealth through financial inclusion. The organization operates five funds holding aggregate assets of approximately $350 million as of 2022. These include four microfinance funds and a climate fund encouraging “Indonesian smallholders”. [to] intensify work on their existing plots instead of clearing the rainforest. NMI is owned by Norfund, which is backed by the Norwegian government; the Danish Investment Fund for Developing Countries, known by its Danish acronym IFU; and eight private companies from 2022. The organization has offices in Denmark, India, Indonesia, Kenya and Norway.

By Ben Greissman, Research Associate

Sources and additional resources

INM press release
https://www.nmimicro.no/news/nmi-invests-in-lolc-cambodia/

Homepage LOLC Cambodia
https://www.lolc.com.kh

Description of the overseas operations of the LOLC group
https://www.lolc.com/overseas-expansion

LOLC Group Annual Report
https://www.lolc.com/annual-reports

Orix Annual Report
https://www.orix.co.jp/grp/ir/library/annual_report/

MNI home page
https://www.nmimicro.no

Previous article by MicroCapital on NMI
https://www.microcapital.org/microcapital-brief-juhudi-kilimo-rural-mfi-in-kenya-sells-39-equity-stake-to-nordic-microfinance-initiative-for-3-1m/

Previous MicroCapital article on LOLC Cambodia
https://www.microcapital.org/microcapital-brief-microfinance-institutions-lolc-cambodia-visionfund-lanka-borrow-2-4m-grameen-credit-agricole-foundation/

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