Amret once again had a very positive year in 2018, overperforming notably in terms of outreach to clients, retail deposits and operational efficiency. This translated into sustainable financial performance for the institution despite a challenging context in Cambodia, with competition increasing on the market following the impact of the regulatory changes made in 2017. The latter included: first, the introduction of an interest cap for microfinance institutions; the modification of the rules on provisioning; and finally, new rules on solvency ratios. Amret adjusted its strategy to comply with these new requirements and continued to serve its clients responsibly, as illustrated by the fact that it maintained an excellent portfolio quality over the year with PAR 30 at 0.25% at the calendar year’s end.
The institution pursued its mid-term strategy, Amret+, to ensure that it upholds its position as a leading player in the microfinance sector, a one-stop shop for its clients with a lasting positive impact. This strategy is centered around four key pillars: 1) expanding outreach while continuing to focus on serving agriculture and micro and small business clients; 2) developing client-centric products tailored to each target segment with easy access channels and a high level of customer service at each touch point; 3) improving the client experience as well as staff productivity with new technologies; and 4) investing in talent and staff capacity building, to make Amret an employer of choice with a clients remote access to services. Amret is also focusing on improving its processes and data management. A revised regional organization will be implemented with improved training, performance monitoring and toolkits for branch managers and heads of regional offices to boost performance. Amret will work on accompanying its staff throughout the development of Amret+ with improved recruitment processes, training and capacity building programs and internal communication, shaping Amret’s status as an employer of choice. Finally, the institution will continually mitigate strategic risk by working closely with regulatory bodies and other players in the sector and reinforcing the management of all other types of risk, including credit, operational and financial risk.
This transformation will enable Amret to become the leading responsible financial institution in Cambodia with regards to client outreach, range and quality of services and profitability. The institution will remain true to its mission to serve urban and rural MSMEs and households with low to medium incomes with innovative and accessible financial services. Amret will carry on being a pioneer in terms of responsible finance, contributing to the evolution of the financial sector through maintaining its focus on strong and fair working environment. The institution will also focus on optimizing efficiency and maintaining strong financial performance, with robust risk management
Several achievements were made in 2018 on these four key areas. Firstly, a new, more refined, client segmentation was implemented across the institution, with training and support of commercial staff on how to target, serve and retain Amret’s key client segments with a more clientcentric approach. Amret streamlined its methodology for serving low-income clients, taking into account the level of saturation on the market, offering them tailored group loan products while maintaining a satisfactory level of risk. For individual microloans, work began on a new automated Loan Origination System which will digitalize the loan process to build staff efficiency, shorten the credit application process time and enhance the client experience. Amret was able to reinforce its risk culture, with a focus on ensuring that it does not contribute to over-indebtedness in the market, even at the cost of losing clients and market
In 2019 and beyond Amret will continue to adapt and innovate, pursuing the transformation of the commercial teams to maintain a client-centric approach. A mobile banking service (mobile app) will be launched to give responsible lending, following and defining best practices. This is confirmed by its adherence to the SMART Client Protection Principles and renewed status as a certified organization until 2020.
On behalf of the board of directors, I would like to express my gratitude to our shareholders and partners for their continued support of Amret and to thank Amret’s management and the entire staff for their constant hard work to strengthen Amret’s status as a model financial service provider. I would also like to thank Chea Phalarin for his commitment and great contribution to Amret’s development as CEO over the past 20 years and wish him all the best in his retirement. Amret’s new CEO, Dos Dinn, has our full support and we are confident that under his dynamic leadership, the institution will accelerate to the next level of responsible financial inclusion.
Amret’s sustained efforts to respond to the changing needs of its target clients and an evolving market will permit it to stay at the forefront of the microfinance sector and ensure that its services continue to have a real end benefit
Dr Claude FALGON
Director, Advans SA