South Korea's KB takes over Cambodia's biggest microlender

Sector hits record profits despite COVID and borrowers' overindebtedness

20210826 Prasac Microfinance Institution and KB

Prasac Microfinance Institution, Cambodia's largest microcredit lender, is now fully owned by South Korea's KB Financial Group. (Source photos by EPA/Jiji and screenshot from Prasac Microfinance Institution's website)

SHAUN TURTON, Contributing writer

August 27, 2021 15:30 JST

PHNOM PENH -- South Korean banking giant KB Financial Group is increasing its bet on Cambodia's microcredit industry, a fast-growing $13 billion sector facing increased scrutiny over concerns about overindebtedness and human rights violations.

New York-listed KB this month announced it had taken full ownership of Prasac Microfinance Institution, Cambodia's largest microlender, completing an acquisition that began in April 2020 when it paid $603.4 million to buy 70% of the company from Sri Lanka's LOLC Holdings.