Cambodia experienced with economic downturn in 2009 during the world financial crisis in 2008-2009. The GDP growth was 6.7% in 2008 and declined to 0.1% in 2009. Again, ten years later— world pandemic, the COVID19, brought this country with economic recession of 3.1% contraction in GDP while it was around 7% growth in average for the last ten years before the world outbreak. The pandemic had been controlled under the vaccination campaigns and penetrations. Cambodia and the world had adapted the new normal life through living with the world pandemic and COVID19 measures in 2021 and 2022 in which started opening slowly some business activities, pushed its economic growth around 3% and 5.2% in 2021 and 2022 respectively. However, world has been under pressure again with Russia-Ukraine war. Rising Inflation as results of interest rate increase by the US Federal Reserve and cause the appreciation of US dollar, leading world financial cost increase. With inflation, slower demands in some industrial export sectors and construction continue to be constraint for the people income, especially the low-income people. Among countries in the region, Cambodia is more resilient for better recovery and reform its economic growth. The GDP growth rate is projected 5.8% in 2024 increased from 5.4% in 2023.
With GDP per capital of US$1,917 per annum by 2023, it is reflected to income of Cambodian people and a vital role of Microfinance sector in economic momentum enablers through their lending activities of micro and small loan. Total loan portfolio of microfinance sector has been provided to key economic sectors, such as 31.2% for household, 22% for Agriculture, 20.2% for trade and commerce and 11.4% for services. Complement to the Mass Market segment of Cambodia Post Bank (CP Bank), the parent company with 100% shares of FUNAN Microfinance, targets to people with low and lower-middle income. This is a part to join and support the Government strategy to uplift Cambodiato upper-middle income by 2030. 51 branches countrywide—FUNAN reaches to where is underserved of its target segment. With approximately US$4,300 loan per client, we have lent to people in micro agriculture and micro & small businesses at 31% and 18% of total portfolio respectively
For the financial year 2023 of Funan Microfinance, the net profit was US$2 million while the total asset increased to US$81.5 million. The ROA ad ROE were recorded 2.4% and 8.8% respectively in 2023. Even the net profile of FUNAN dropped 38.2% in 2023 comparing with 2022; it was still better than MFI industry as whole with a declining rate at 70.9%. The spread became flat as results of increasing in Non-performing loan (NPL) and rising cost of fund.
We would like to thank customers, regulators, business partners, lenders, staff, and shareholders for their supporting, cooperating, trusting, and hard working for FUNAN to achieve its performances so far. FUNAN commits to achieving its long-term Vision—to be the best Microfinance institution (MFI) that enables success and enriches lives of Cambodia people—and our Mission—to provide innovative financial products and services, that are simple, convenient, and fast; and comply with regulations— please keep your supporting us for years ahead.
Stay safe and healthy.
Lok Neak Oknha Dr. Pung Kheav Se
Chairman of the Board of Director.