Cambodian Students Association in Nagoya

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Commercialization of Microfinance: A Case Study of ACLEDA Bank of Cambodia

March 31st, 2008 · No Comments

Author: HENG Sohpea

Publication date: March 2008

Language: English

Type of documents: Master’s thesis


Objective This study aims to investigate and analyze the implications of transformation of ACLEDA from a microfinance NGO into a commercial bank, and seek to understand whether ACLEDA has expanded or narrowed the position of its NGO’s mission to achieve social development. The study also identifies the strategy of transformation process affecting the NGO’s objective in promoting the social mission. The analysis focuses on the changes in the outreach of its services, its targeted clients, household welfare of the poor clients, and on whether the transformed ACLEDA is closer to or farther from its original poor clients. Especially, the study examines advantages and disadvantages of ACLEDA’s transformation affecting its poor clients, which focus on features and indicators of demand and supply sides rather than on averages of loan outstanding balance. Moreover, the study investigates and determines whether ACLEDA is upgrading or retaining its original target market following the transformation. In the process of transformation from a microfinance NGO into a commercial bank, there are some critical issues concerning the transforming procedures expressing concern over changes of target market from poor clients to less poor or rich clients or from micro business loans to small and medium business loans. This comes to people’s concerns because some poor are unable to access microfinance services as a result of transformation by some NGOs, and other poor clients are dropped out from transformed institutions due to high condition of collateral requirement. This study also aims to reflect whether ACLEDA drifts from its original mission after the transformation process. With this regard, the study is to find out how transformation impacts the position of microfinance NGO’s mission towards poverty reduction, and to understand the useful experience of a transforming microfinance NGO into a commercial bank by maintaining the adherence to achieve the mission of poverty alleviation.

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