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 said it was given the final approval notice on August 22 and has decided to change the local company’s name to Nonghyup Finance Cambodia. It will hold a launching ceremony on September 11, The Korea Times said in a report last week.
SAMIC, a small lender with total assets of $15.4 million and total capital of $5.3 million, is headquartered in Phnom Penh and has 18 networks centered on 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 said.
“It will actively expand loans for real estate mortgages and loans for SMEs, as well as providing financing for agricultural equipment,” it added.
An official at NH Nonghyup Bank said, “We will find out about the collaboration model with the local Ministry of Agriculture and will conduct a differentiated marketing strategy based on the bank’s know-how.”
Nonghyup Financial is a subsidiary of South Korea’s National Agricultural Cooperative Federation, or the Nonghyup Group.
So Phonnary, vice-president of Acleda Bank, told Khmer Times she welcomed the entry of the company into the local financial market, saying it makes the sector more competitive.
“All competition is good for the sector, as long as it is fair and ethical,” she said. “More banks mean more choices for customers.
“Every player in the market has its own sector that it focuses on. Nonghyup Financial, for example, comes from the real estate sector. Every new entrant brings with it a new level of service that forces other companies in the industry to adjust,” she said.
With the acquisition of the Cambodian company, NH Nonghyup Bank now has six subsidiaries abroad. In addition to its Cambodian subsidiary, it has one branch in New York and Hanoi, a micro-loan corporation in Myanmar, and one office in Beijing and New Delhi.