Banks in Cambodia: High interest rates on deposits in microcredit that can go from 4% to 10% per annum
For companies doing business in Cambodia, banks offer high interest rates on deposits tied to microcredit, which can range from 4% to 10% annual net (after deducting taxes) on short and medium-term deposits (3-6 -12 months). Often the Microcredit is confused with the small loan that is granted in Europe and in the rest of the world, with the typical consumer financing for goods and services (TV, home appliances, furniture, travel, etc.) that the consumer can buy in installments.
Microcredit, we intend to explain in this page, however, is granted only in third world countries, and consists of very small loans (from $100 up to a maximum of $2,000 USD).
Microcredit allows a huge range of people in third world countries to have access to a loan to start a micro economic activity (start a taxi service on scooter, preparing pancakes to the market with a cart, take a rotary tiller or water pump for their land etc.).
Lending money to the poor is less risky than lending it to the rich. This may sound strange but it has been observed through studies that have lasted years, that individuals living in extreme poverty in the countries of the third world, even if it has no real guarantees the “poor” will become a solvent debtor, can be trusted if put in a position to repay the debt.
The interest rates that are paid off with microcredit are far more than a normal loan disbursed. The loan is not returned month by month, but rather ‘week to week. It may be a few dollars, but so many drops that create a real rain of money has generated and is still generating wealth not only for those who receive the loan, but especially for those that deliver the loan. In short, to invest today in banks and institutions that provide microcredit can be very beneficial and safe. You may have an interest rate that until a few months ago could reach up to 10% annually (sometimes more).
For more information on incorporating a company in Cambodia, contact us now!