[PHNOM PENH POST]
SONATRA Microfinance Institution is a new entrant into Cambodia’s very competitive MFI sector. Director Sorn Sokna spoke with The Post’s May Kunmakara
about the challenges his company faces as it tries to carve out a niche
for itself in that space, as well as the opportunities he sees going
forward.
Tell me the history of Sonatra and why you decided to launch this business?
Sonatra
was licensed by the National Bank of Cambodia in January as part of
joint venture with a Japanese investor. But they hold only a small
portion of shares, 15 percent. We’re majority local-owned.
In
addition, with the cooperation of our Japanese shareholder we received
additional loans of around US$50 million from both Japan and Singapore
so as to increase our loan capacity. We want to be a strong microfinance
institution in Cambodia.
We’re well aware that many small and
medium-sized enterprises are facing a fund shortage. I think we can help
them to improve their businesses, as well as farmers. In fact, I think
our MFI provides much easier access to loans than banks.
What sectors do you focus on? Who are your target clients?
Of
course, we don’t focus on any specific sectors. Economic circumstances
will dictate which customers seek out loans, though we do tend to serve
farmers and SMEs.
How has Sonatra taken shape since you began operations?
We
see huge demand for loans from farmers and SMEs as our economy
continues to get better. We want to offer even more loans to them, but
we are still at the initial stages of our development. Still, we plan to
take advantage of the growing market by increasingly extending loans to
entrepreneurs who are willing to improve their businesses.
What is the competition in the industry like at the moment?
There’s
a lot of tough competition right now given the number of players in the
industry, especially those with many years of experience. However, I do
hope that what we can do now is strengthen our capacity and clients’
confident in our services. We think we can do that. We see our business
as being on a very good track.
What is Sonatra’s strategy to attract customers given the tough industry competition?
We’re
still quite new in the industry, so we have not done to much promote
our business since getting licensed. However, we think going forward
that we’re ready to compete with the more experience MFIs. We will offer
customers lower interest rates than our competitors. And we plan to
capitalise on the huge loan-growth demand we’re seeing in the
agricultural sector. We have a partner in pharmaceutical industry as
well.
So we will loan to customers who want to buy medicine or
seek treatment at medical clinics. Also, we will give students who are
unable to pay for school a chance to pursue their studies by offering
loans for them to attend the Financial Institute of Cambodia.
How does the average Cambodian view the idea of taking and paying back loans?
I
think people clearly understand the process. That’s especially true
compared to years ago when a lot of MFIs struggled with a general lack
of knowledge about how loans worked. Now people are taking these loans
to help grow their businesses, and they will repay the loans in full.
What are the opportunities and challenges facing MFIs right now?
The
recovering economy gives us lots of opportunities to grow in the
industry because there are many new businesses being started. They need
more and more money to better their operations, especially in the
agriculture sector.
However, there are challenges, too. We
really don’t know if our customers put the money we loan them to good
use. So Sonatra now offers a service to help these companies come up
with business plans that allow them to get the most effective and
efficient outcome from the loans they take.
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