According to the World Bank overview, the Cambodia’s Economy continued to recover in 2022. The recovery of the service sectors are strengthening, driven largely by pent-up consumer demand. The economic growth for 2023 is projected to reach 5.2 percent. Downside risks include a marked slowdown in external demand, further global financial tightening, and a renewed oil price shock. On the upside, China’s reopening presents an opportunity for Cambodia to boost its travel and tourism industry and to attract Foreign Investment Inflows. Initially led by a recovery of export-oriented manufacturing, growth drivers have started rotating to the service sectors, which are accelerating, driven by pent-up consumer demands and the return of foreign tourists. This is offsetting a recent decline in Cambodia’s goods exports hit by the recent slowdown in external demand. Domestic consumption is also being boosted by the easing of inflation which declined to 2.9 percent in December 2022 as energy and food prices stabilized.
Meanwhile, Cambodia's Economy has shrunk due to the effects of the prolonged Russia-Ukraine war and the recent spread of the COVID virus, which has led to rising inflation and disrupting the ongoing supply chain. In response to this situation, the Royal Government of Cambodia promulgated the strategies and measures as well as injected the national budget to reduce the inflation rate and keep the economy growing in 2022 and the following years. Furthermore, the government also injected fund to support and restore the micro and small business and economic activities and the poor and vulnerable families affected by the COVID virus. At the results, these mechanism of the government effetively reduce the inflation rate and boosted the economic growing in 2022.
Based on the senior official at the National Bank of Cambodia mentioned that the microfinance sector in Cambodia has been playing an important role in contributing to economic and social development, especially the reduction of poverty in rural areas. The government has supported the sector by defining a more clear vision and development-oriented strategy, which has enabled the sector to expand its scope of operations sustainably and confidently, as well as helping to create new opportunities for development finance service aiming to provide Cambodians with effective and environmentally friendly financial services. As of the end of the fourth quarter of 2022, the total assets of microfinance institutions and rural credit institutions were approximately 44.4 trillion riels (equivalent to $10.8 billion), of which total loans were approximately 38, 9 trillion riels (equivalent to $9.5 billion) to provide more than 2.1 million customer accounts, the NBC report stated. And for Deposit-taking MFIs received a total of approximately 19.4 trillion riels ($4.7 billion) from about 2.7 million depositors. The results achieved so far are due to the efforts of the National Bank of Cambodia and the cooperation of banking and financial institutions in providing loans to customers in doing business and restructured loans as well as promoting People’s livelihood as well. Referred to the Annual Report 2022 of the National Bank of Cambodia, there were 59 Commercial Banks, 09 Specialized Banks, 05 Microfinance Deposit Institutions, 82 Microfinance Institutions, 224 Rural Credit Operators, 16 Leasing Companies, 05 Third Party Processors, 34 Payment Service Providers, 1 Credit Bureau Cambodia, 06 Foreign Bank Representatives and 2,869 Foreign Exchange Traders. At this result, we notified that despite the impact of the crisis, the banking and microfinance sector remains stable and resilient, with continued investment from both local and foreign investors in this sector in Cambodia.
Due to the impact of the global COVID pandemic and prolonged the Russia-Ukraine war in 2022, the Porfolio at Risk (PAR) of financial institutions have remarkably increased, including FUTABA Microfinance Plc, as well. However, within the hard time, we could still keep our profit at 449,426 US dolars with its total assets of 15,743,780 US dolars. These positive results were from full participation of all staffs, especially credit team, who made effort to well manage and solve the issue on time.
On behalf of the Board of Directors, I would like to thank to our customers, our Japanese Shareholder, Chief Executive Officer, Assistant Chief Executive Officers, and all staffs of FUTABA Microfinance Plc., for much contribution, work hard, and support to implement and achieve of business strategic of the Company. Especially, thank to NBC and corporate partners for always providing supporting and coordination with our MFI in managing all activities with transparency up to now and in the future.
At the end, we would like to blessing you and your family have good luck, good healthy with happiness, wisdom, and successful all the businesses forever.