Kingdom’s AMK sells 80% of stake to Taiwanese bank
Chinese start-ups help in job creation
THE new shareholder of AMK Microfinance, one of the few remaining microfinance institutions (MFIs) to focus on small loans in rural areas, on Tuesday expressed a commitment to preserve its business model.
It said the company will continue to focus on micro and small loans for the rural market.
With an average loan size of only $700, AMK is one of the few remaining MFIs in the Kingdom that still focuses on small loans.
The declaration from the new shareholder comes after the company announced in August that it had officially sold 80 per cent of its stake to Taiwan-based Shanghai Commercial & Savings Bank (SCSB) for an undisclosed sum.
‘AMK has done well’
Speaking at a press conference on Tuesday, SCSB executive vice-president John Yung said its mission is to provide better financial services to rural Cambodians.
“AMK has done very well as the loans they offer are not for consumer spending but helps generate economic activity.
“We commit to sticking to what AMK has been doing because it is a major MFI that actually spreads out to rural areas. It covers about 90 per cent of villagers – even other major [institutions] don’t cov- er that much,” he said.
Yung said AMK’s management infrastructure and business model will remain the same since SCSB’s help is primarily focused on corporate governance and control of capital funding.
An annual report at the end of last year showed that AMK’s total borrowings stood at $214 million, while total de- posits were at $121.6 million. The company saw a decline in net profit last year – down to $5.27 million from $6.63 million the previous year.
AMK CEO Kea Borann said on Tuesday that the decision to work with a foreign bank as a new shareholder is a normal change in the industry as the sector has always had a new turning point every 10 years.
He said all lending institutions were set up by NGO funds and operated as NGOs during the 1990s. But there was a commercialisation of the sector during the 2000s as institutions became private enterprises.
Many foreign banks, Borann said, were now entering and acquiring major MFIs which is another turning point.
He said SCSB’s share in AMK will allow the latter to work better as it will be able to strengthen human resources, source funds and utilise the bank’s new technology.
“I believe that working together with [SCSB] will help us to provide better financial services and give confidence to Cambodians, especially our rural clients,” he said. CHINESE start-ups are becoming more successful in creating jobs, and entrepreneurs more highly educated, according to a new report by Tsinghua University.
The 2017/2018 China Report from the Global Entrepreneurship Monitor found that last year, the proportion of companies that can offer six or more jobs was 27 per cent, up seven per cent from 2006.
Between 2002 and last year, the proportion of highly educated entrepreneurs also climbed. The report also found that there were more people with high incomes starting their own businesses.
‘Idealising expectations’
Xu Ziwei, a psychotherapist working at the mental health centre of the Renmin University of China, said more entrepreneurs are becoming mentally mature.
“In the past, some entrepreneurs idealised their expectations. Many regarded entrepreneurship as a magic weapon to change their own destiny . . . To some extent, they tended to overestimate themselves while underestimating the real situation,” Xu said.
T h e E n t r e p r e n e u r s h i p Research Centre on G20 Economics, an affiliate of Tsinghua University, conducted the survey.
The report found Chinese entrepreneurs aged 25-34 are the most active entrepreneurs, the same as global trend. Over 60 per cent of Chinese respondents said they have started businesses in pursuit of an opportunity rather than out of necessity.
It said the overall entrepreneurial environment has been optimised, in terms of tangible infrastructure, market openness, cultural and social norms.
The uptrend of China’s startup activities was fuelled by the country’s steadfast commitment to fostering innovative ideas and entrepreneurial spirit. In 2014, the government proposed mass entrepreneurship and innovation, which has been viewed as a new engine for China’s economic growth.
According to the Tsinghua report, more than 60 per cent of Chinese entrepreneurs operated wholesale or retail businesses. In comparison, there were a smaller proportion of Chinese engaged in highervalue business industries, such as information, communications, financial and professional services.