OPIC and TPC Support Expansion of Home Improvement Loans for Low-Income Cambodians with Historic $5 Million Investment



Wednesday, February 27, 2013

(OPIC)  The Overseas Private Investment Corporation (OPIC) and Thaneakea Phum (Cambodia), Ltd. (TPC) today announced the closing of a US$ 5 million term loan to fund the expansion of TPC’s portfolio of microfinance loans for low-income borrowers.

The historic loan is OPIC’s first direct loan to a Cambodian institution, and is part of OPIC’s global initiative to support microfinance lending and improve living standards in emerging markets worldwide. At least 50 percent of the funds will be allocated to expand TPC’s home improvement loan program, while the remaining funds will support group and individual loans for TPC’s predominantly rural, agricultural clients, most of them women. The project is expected to generate approximately 5,000 loans for Cambodian borrowers.

DWM acquired TPC in January 2010, bringing new resources and best practices from the firm’s microfinance experience around the world. DWM had previously worked with OPIC on other investments and was instrumental in facilitating the TPC – OPIC partnership.

TPC CEO Arah Sadava said, “Many Cambodians want to use existing income streams to improve their family’s quality of life, but can’t afford to take funds away from their small businesses. In response, we developed a Home Improvement Loan product with a long tenor and small, frequent payments. This allows our clients to both grow their businesses and improve their homes. We currently offer the home improvement product in eight TPC branches, and will begin offering it in all of our 39 locations by March 1st of this year.”

“Home improvement loans also enhance the income generation of home businesses, and reduce economic vulnerability by building the poor’s assets. This is especially important for those in rural areas who do not have access to savings accounts,” she added.

OPIC President and CEO Elizabeth Littlefield said, “Access to financing is vital to fostering Cambodia’s economic development. Through this microfinancing project, thousands of Cambodians in rural areas will be able to take advantage of business opportunities they might not otherwise have a chance to – and as a result be empowered to improve their quality of life.”

OPIC provides capital to microfinance institutions through investments in microfinance vehicles, targeted credit facilities to individual MFIs, risk-sharing agreements, and guaranties supporting innovative industry efforts. OPIC has committed over $700 million to microfinance projects, which have supported 125 MFIs in 35 countries.

About TPC
Thaneakea Phum (Cambodia) Ltd. (TPC) is a rapidly growing, regulated microfinance institution with a focus on serving low-income women in rural Cambodia. TPC was established in 1994 and is currently the 5th largest MFI in Cambodia by number of borrowers. Primarily a group lender, TPC reaches the lower end of the poverty spectrum while maintaining strong operating performance. As of December 31, 2012, TPC serves 122,077 clients via its network of 39 branch offices in 17 provinces, and since the beginning of 2012 TPC has grown its gross loan portfolio by 46.0% to USD 48.4 million. This growth has been responsibly managed to ensure a top-quality portfolio, and PAR >30 days is currently 0.20%. TPC has been under the supervision of the National Bank of Cambodia as a regulated microfinance institution since 1999.