OVERVIEW OF PRASAC

Siem Reap Angkor, 08 June 2015

 CONTENT
1. About Cambodia
2. Overview of Prasac
3. Integration of SPM into Prasac’s Strategy &
Operations
4. Social and Financial Performance Highlights
5. The Implementation at Branch level
6. Ways Forward

2
ABOUT CAMBODIA

3
 ABOUT CAMBODIA
• Area:181,035 sq km, and border with Thailand, Vietnam, Laos
and gulf of Thailand.
• Population: 14,952,670 million in 2012, total households:
2,832,691, rural households: 2,314,548 (82%)
• Average household size: 4.7 person, population in agriculture:
72.3% (Census 2008)
• GDP per capita: USD 1,024 in 2013
• GDP Amount: USD 15.6 billion in 2013
• Life expectancy: 61 years old (WB, 2008), literacy rate (adult
15+): 78% (WB, 2008)

4
OVERVIEW OF PRASAC

5
 PRASAC VISION AND MISSION
Vision
To improve the living standards of the rural people contributing
to sustainable economic development by being a financially
viable microfinance institution.

Mission
To provide sustainable access to financial services for rural
communities and micro-enterprises.

6
PRASAC DEVELOPMENT BACKGROUND
On process of transformation into Commercial Bank

Introduce new financial products with ATM launching in to 30

locations throughout provincial towns and Phnom Penh City

Bigger, Better and more convenience (Asset size $162M,

PAR 0.25%, working nationwide with 98online branches) Received a deposit-taking license from
the National Bank of Cambodia.

Modernized system to Oracle FLEXCUBE

Universal Banking

Provided financial services throughout the

country, with capital of 16 Billion Riels

2007: Commercialized in order to attract

investments from commercial and social investors

2004: Registered PRASAC MFI Limited

and licensed from NBC

1998: Consolidated to single project with one

credit component

1995: EU funded rural project in 6 provinces,

with three credit components

1995 1998 2004 2007 2008 2009 2010 2011 2012 2014 -2015

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ORGANIZATION STRUCTURE
Shareholder Assembly Meeting

Very good governance structure and BOD

organizational structure Audit Committee Risk Committee Remu. Committee

 Shareholder assembly is the highest Chief Executive Officer

Executive Committee

authority Internal Audit

IT Committee Credit & Risk Commit. ALCO Product Dev. Commit. Disciplinary Commit.

 The Board of Directors: Operations Management

Division
Financial Management
Division
Business Management
Division
Marketing Management
Division
HR Management
Division

 The Board members are represented Risk Management Core Banking Finance Department Credit Department Product Personnel BP & Strategies

by all shareholders’ representatives

Credit Risk Financial Control Lending Credit Dev. Recruitment BP & Strategy
Application & MIS
Operational Risk Managerial Account Credit Control Deposit Dev. Personnel Admin Company Secretary
DBA

and one independent director Market Risk

Compliance
Teller Support

IT &
Fin. Accounting

Planning & Budget

Credit Portfolio Mgmt

NPL
Fee Based Dev.

Communication &
Remm. & Benefits

Performance Mgmt
Project Mgmt

Methodology

 There are three Board committee Distribution Channels Marketing

MIS Security Regulatory Reporting Banking Service Training & Staff Legal
ATM / POS Department Comm. & Branding Development
Treasury Security

 The Board meets every three months

Deposit Research Training
E. Banking
SPM CCTV
System Service Investors Relations Deposit Portfolio Mgmt

Customer Service Guards

Treasury Mgmt Fee Based
Help Desk Service
Branch Cash Support Branch Network Mgmt
IT Security

 The executive committee General Admin

Int’l Banking

SWIFT
Performance Mgmt

 Consist of five six members from

Branch Network Mgmt
General Admin
Money Transfer
Logistic Regional

division heads and

Trade Finance
Procurement
Branches

 Lead by Chief Executive Officer Branch Manager

 Functional Division and Departments:
 5 Divisions
 16 functional department Deputy Branch Manager

 Internal Audit Department is the

independent department and directly Admin Back-Office Operations Front-Office Commercial Credit Service

report to the Board 1.

2.
Admin officer
Driver
1. Chief Teller
2. Teller
1. Chief Client Advisor
2. Client Advisor
1. SME Credit Officer
2. Credit Officer
 There are several management committee 3.
4.
Security Guard
Cleaner

established
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 SHAREHOLDER STRUCTURE
2004 - 2006 2007 - 2011 2012 – Now
• CRDF – 95% • BIO – 18% • BIO – 22.25%
• PSCo – 5% • DCG – 18% • DCG – 22.25%
• Capital – 62K$ • FMO – 18% • FMO – 22.25%
• LOLC – 18% • LOLC – 22.25%
• OIKO – 18% • PSCo. – 11.00%
• PSCo. – 10% • Capital – 72MUSD
• Capital – 3.8MUSD

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 PRODUCTS/SERVICES

LENDING PRODUCTS: BANKING SERVICES:

1.Retail Lending (Households)  DEPOSIT PRODUCTS
 Group loans 1. SAVING ACCOUNT
 Individual loans  Saving Account (Settlement
 Personal loans account)
 Education loans  Unfixed Saving Account
 Home improvement loan  Retirement Saving Account
 Bio-gas loan 2. TERM DEPOSIT
 Emergency loan  Term Deposit Account
 Sanitation loan  FEE-BASED PRODUCTS
 Factoring loan  Foreign Exchange (FX)
2.Business Lending (SME)  Local Money Transfer
 Working capital loans  Payroll Service
 Investment loans  Mobile & Internet Banking
 Micro-loans<=1,500$  Remittance(MME)
 Small loans>1,500$-15,000$  ATM
 Medium loans>15,000$-  Bill Payment Services(Utilities, Top
35,000$ up,..)
 BTL>35,000$  
INTEGRATION OF SPM INTO
PRASAC’S STRATEGY AND
OPERATION

11
 PROCESS OF INTEGRATION SPM
• Administer Social Audit employing Cerise SPI
• Conduct Strategic Realignment Workshop in 2011to:
 Clarify vision and mission

 SWOT analysis

 Identify key issues and strategic choices

 Develop strategy map

 Develop balance scorecard (BSC measurement system,

change management plan, and prioritize the activities year

by year)

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13
ADAPTATION THE USSPM

14
 PROCESS OF INTEGRATION SPM
• Translate the plan to real implementation
 Integrate social strategy into the strategic plan

 Provide training to staff on SPM

 Modify products based on market driven

 Enhance human resource manual

 Develop the social performance tracking system

• Self-assessment & evaluation

 Use Cerise SPI for the annual checking

 Rating agencies

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 SOCIAL AND FINANCIAL
PERFORMANCE HIGHLIGHTS

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 FINANCIAL AND SOCIAL HIGHLIGHTS
- Total Asset: USD 805 M
- Total loan portfolio: USD 670 M
- Nbr active borrowers: 272 thousand
- Non-performing loan: 0.26%
- Total deposit balance: USD 376 M
- Nbr depositors: 390 thousand
- Operating expense ratio: 5.88%
- Average loan disbursement: USD
3,034
As of April 2015
- Nbr of loans per credit officer: 119
- Nbr of loans per staff: 58
- Return on Assets: 4.93%
- Return on Equity: 42.20%
- Nbr of library constructed: 9
buildings
- Nbr of student outreach: Above 6,300
- Total employees: 4,570
- Nbr employees as women: 3,388
- Nbr Credit Officer: 2,230
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OFFICE NETWORK

180 Branch Offices

87 ATM

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 PORTFOLIO AND CLIENT
800,000 300,000
272,535
700,000 251,112
250,000
600,000
196,906
200,000
500,000

400,000 134,146 150,000

125,127
112,872
300,000 94,264 94,555 100,116 87,945
82,545 100,000
200,000
50,000

104,952

151,239

580,544
214,857

379,073

670,611
58,905
11,108

22,045

33,548

64,088
100,000

0 0
Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Apr.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Loan portfolio (KUSD) Clients

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PORTFOLIO BY SECTOR IN APRIL 2014
5- Construction ; 6-Consumption;
4657787.28641 207687920.322222;
976; 1% 31%

4- Transporta-
tion;
48059121.6854
321; 7%

1- Agriculture;
223684448.641975;
33%

3- Service;
55176823.1297
531; 8%

2- Trade and Commerce;

131345083.335062; 20%

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 PAR30 RATE
1.80% 1.66%
1.60%

1.40%

1.20%
1.02%
1.00%

0.80%

0.60% 0.51%

0.40% 0.26%
0.24% 0.22% 0.23% 0.20% 0.21%
0.14% 0.18%
0.20%

0.00%
Dec. 2005 Dec. 2006 Dec. 2007 Dec. 2008 Dec. 2009 Dec. 2010 Dec. 2011 Dec. 2012 Dec. 2013 Dec. 2014 Apr. 2015

PAR30 RATE

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 DEPOSIT MOBILIZATION
400000
350000
300000
250000
200000

305163.8062561

376605.5024261
150000

96

73
100000

138619
57211
50000

5971
382

240

184
253

481
0 62
Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Apr.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Deposit balance-KUSD

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THE IMPLEMENTATION AT
BRANCH LEVEL

SIEM REAP BRANCH OFFICE

23
 BACKGROUND
• PRASAC Siem Reap was established in Jan 01, 2008 with
only 01 sub-branch office (sub-branch Siem Reap). Later
Sub-branch Soutr Nikum, Chi Kraeng, Kralanh, & sub
branch Pouk.
• In August 2013, PRASAC transformed from sub-branch &
service offices into branch offices managed by Branch
Manager and under control of Regional Manager.
• Presently branch Siem Reap under control of Regional VII.
• Siem Reap province is the potential area for tourisms, most
of jobs and business related to tourists and the rest are
agriculture, production (handicraft, furniture…), etc.

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 STAFFING
No Position Dec-14 April- %
15 Increase Growth Education Other
* Degree :
1Branch Manager(BM) 1 1 0 0% BM: MBA in Management
DBM: BA Finance & Banking
2Duputy Branch Manager (DBM) 1 1 0 0% CTL: BBA in Finance & Banking
Teller: BBA
3Chief Teller 1 1 0 0% 1. Finance and Banking
4Teller 6 6 0 0% 2.Account and Finance
CO: BBA
6Credit Officer 18 19 1 0% 1. Finance and Banking
2.Accounting and Finance
7Customer Service Officer 2 2 0 0% 3.Law
4.Management
8Client Advisor 1 1 0 0% 5.Agriculture
CSO/CA:
9BDRO 0 1 1 0% 1. Finance and Banking
2.Accounting and Finance
10Driver 1 1 0 0% Driver/Guard/Cleaner: Bac II
*Staff by Sex:
11Guard 3 3 0 0% Female: 10 = 27 %
12Cleaner 1 1 0 0% Male: 26 = 73%

  Total 35 37 2 5%  

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 OPERATIONAL AREAS & MARKET SHARE
FOR APRIL 2015
COMMUNE VILLAGE MARKET SHARE Average Per Village
DISTRICT OUTS
NAME Not Operate COVE Not Operate TT Active TANDING
All COVER % All % % Client Outstanding
Yet R Yet Household Client
10.84
Angkor Thum 4 4 0 100% 27 26 2 92% 4,678 507 % 731,828 20 28,147

Banteay Srey 6 6 0 100% 37 29 7 76% 6,629 796 12.01 1,673,307 27 57,700

%
Prasat Bakorng 6 6 0 100% 46 40 0 100% 9,123 705 7.73%1,261,841 18 31,546
Krong Siem
6 6 0 100% 45 45 5 89% 25,446 1,384 5.44%4,275,920 31 95,020
Reap
Total 22 22 0 100% 15 140 14 90% 45,876 3,392 7.39 7,942,896 24 56,735
5 %

MAP OF SIEM REAP CITY

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 SUMMARY ACHIEVEMENT
April-15/
No ITEMS Dec-14 April-15 Growth/Dec-14 Plan Variance

1 Portfolio 6,697,869 7,942,896 1,245,027 8,256,694 (313,798)

2 Loan Client 3,037 3,392 355 3246 146
3 PAR 30 ACC 0 0 0 0 0
4 PAR 30 Client 0 0 0 0 0
5 PAR 30 Amt 0 0 0 0 0
6 PAR 30 % 0.00% 0.01% 0.01% 0.30% 0
7 Deposit Balance 6,424,825 8,170,289 1,745,464 9,000,000 (829,711)
8 Nr. Of Depositor 5,353 5,761 408 7,837 (2,076)
9 Profit and Loss 422,276.00 205,468.77     
10 Cost to Income 38.90% 30.92%     
11 ROA 7.53% 7.50%     
12 ROE 148.84% 177.57%     

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 Portfolio by sector
1_Agriculture
2_Trade and Commerce
13.28% 1.44% 3_Service
9.51%
13.79% 4_Manufacturing
5_Construction
6_Transportation
7_Home Improvement
8_Real Estate/Housing Loan
8.21% 9_Auto Loan
10_Personal Loan

0.58%
10.73% 0.22%

0.79%
41.45%

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 PORTFOLIO BY LOAN SIZE
Loan size 2015
Apr-15
02. >75$ AND <= 500$ 38,469
03. >500$ AND <= 1,000$ 250,115
04. >1,000$ AND <= 1,500$ 403,457
05. >1,500$ AND <= 2,500$ 1,313,224
06. >2,500$ AND <= 5,000$ 2,748,455
07. >5,000$ AND <= 10,000$ 1,565,610
08. >10,000$ AND <= 15,000$ 921,644
09. >15,000$ AND <= 25,000$ 453,932
10. >25,000$ AND <= 30,000$ 27,500
11. >30,000$ AND <= 50,000$ 220,490
TOTAL 7,942,896

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 PAR1 %
1%

1% 0.52% PAR1 %

0.30%
0.17% 0.17%

0% 0.00%
Dec-14 Jan-15 Feb-15 Mar-15 Apr-15

30
 PAR30 %

PAR30 %
0%

0% 0% 0% 0%
Dec-14 Jan-15 Feb-15 Mar-15 Apr-15

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DEPOSIT PROGRESS BY CUSTOMER TYPE
Dec-14 Apr-15 %
Deposit by Customer Type
Balance Balance Balance
1,250,000 1,250,000
BANK 15%
124,428 124,428
CORPERATE 2%

INDIVIDUAL 5,050,397 6,800,032 83%

GRAND TOTAL 6,424,825 8,174,460 100%

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 BRANCH PRODUCTIVITIES
No Items Achievement Other
1 Number of CO 19  
2 Number of Staff 37
3 CO ratio 51.35%
4 Average Client per CO 178
5 Average Client per Staff 92
6 Average Portfolio per CO 418,047
7 Average Portfolio per Staff 214,672
8 Average Deposit per CO 430,235
9 Average Deposit per Staff 220,931

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 COMPETITOR ANALYSIS
CLIENT &PORTFOLIO

120,000,000

98,777,904
100,000,000

80,000,000 9,789

Client
60,000,000
2,677 Portfolio
2,695 3,235
2,297 2,258
40,000,000 2,378
8,161,225

19,069,610

9,694,966

4,740,825
2,263,368
20,000,000

471,302
0
PRASAC ACLEDA AMRET SATHAPANA HKL AMK KREDIT

34
 COMPETITOR ANALYSIS
DEPOSIT &PORTFOLIO

60,473,104
160,000,000

140,000,000

120,000,000

100,000,000
SA & DEPOSIT
80,000,000 Portfolio
98,777,904

8,074,393
60,000,000

7,156,549
7,689,038

2,926,030
4,740,825
2,244,478
40,000,000
2,263,368

19,069,610
1,523,619

471,302
8,161,225

9,694,966
20,000,000

0
PRASAC ACLEDA AMRET SATHAPANA HKL AMK KREDIT

35
 COMPETITOR ANALYSIS
PAR30AMT &(%)

414,696.48
0.42%
450,000.00

400,000.00

350,000.00

300,000.00 PAR30(%)

250,000.00

0.18% PAR30AMT
200,000.00

150,000.00 0.06%
0.07%

11,434.77
100,000.00

3,134.03
0.01% 0.00%

832.25
702.50

50,000.00
0.00%
-

-
-
PRASAC ACLEDA AMRET SATHAPANA HKL AMK KREDIT

36
 ANNUAL TARGET 2015
KEY PERFORMANCE INDICATOR 2015 Growth rate
Loan Portfolio 10,925,876 63%
Number of Borrowers 3,674 21%
POTFOLIO
PAR30 <0.3% 0%
Write-Off 840 0
Deposit Balance 14,000,000 118%
DEPOSIT Deposit-to-Loan 218% 128%
EFFICIENCY & PROFITABLITY Cost to income <45% 0%
ROA ratio >5% 0%
Customer service 95% 0%
Other fee income 3.50% 0%
Payroll 700 0%
OTHER SERVICES ATM CARD 2,800 0%
MME 55,280 0%
Local money transfer 11,240,000 0%
FX 222,801 0%

37
KPIS OF BRANCH SIEM REAP

38
 LOAN PROCESS & CPP
I. Loan Process:
1. Communication with authority
2. Village assessment
3. Promotion
4. Client assessment
5. Complete loan document
6- Loan approval
7- Loan Data Entry in system FC
8- Disbursement
9- Following up clients
10- Repayment
II. Client Protection Principles:
1. Appropriate product design and
delivery.
2. Prevention of over- indebtedness.
3. Transparency.
4. Responsible pricing.
5. Fair and respectful treatment of
client.
6. Privacy of member data.
7. Mechanisms for complaint
resolution .
39
STRATEGY TO ACHIEVED PLAN
1.Expansio
n
Operationa
8.Strength l Area
Branch
2. Strength
performan
Staff
ce
Capacity
Manageme
nt

Strategy
7. Strength to 3. Strength
Internal Loan
Control Achieved Portfolio
Plan

6.Sterngth
4.Strength
Office
Deposit
Manageme
Collection
nt
5.Strength
NPL​

40
WAYS FORWARD

41
 NEXT STEPS
• Review the results of the rating and self-assessment
• Review loan file to analyze the data in answering to the social
goals

42