"Quoted from Annual Report 2024"

Mr. Brindley de Zylva

Chairman

Dear Valued Stakeholders,​
It is my privilege to present to you LOLC Cambodia’s annual report for the financial year ending 2024. As we reflect on the year’s achievements, challenges, and milestones, I am immensely proud of the progress we have made in driving sustainable growth and delivering value to our stakeholders.

Global Economic Outlook
The global economy is expected to remain stable yet underwhelming, with projected growth of 3.2% in both 2024 and 2025. Over the past year, the global economic landscape has been shaped by persistent inflation pressures, geopolitical tension, and the ongoing recovery from the COVID-19 pandemic. While advanced economies have experienced moderate growth rates, emerging markets have shown resilience, contributing significantly to the global economic recovery. However, uncertainties in trade dynamics and fluctuating commodity prices continue to pose challenges across industries worldwide.

Cambodia’s Economic Growth
Cambodia’s economy is expected to grow by 5.8% in 2024 — up from 5.6% in 2023 — and is projected to further strengthen by 6.1% in 2025 and 6.4% in 2026, according to the World Bank Group. This positive outlook is driven by a revival in garment, travel goods, and footwear exports, as well as a rebound in tourism, with international arrivals reaching 84% of pre-pandemic levels in the first quarter of 2024. The ASEAN region has emerged as Cambodia’s second-largest export market after the United States, while rising foreign investment in manufacturing and agriculture has further contributed to economic recovery. However, construction activity remains subdued due to a continuing correction in the property market, leading to a slowdown in domestic credit growth. That has in turn impacted on private consumption and domestic revenue collection.

Company Performance and Strategic Initiatives
Against this economic backdrop, LOLC Cambodia adopted a cautious yet strategic approach, ensuring sustainable growth while maintaining operational resilience. Our unwavering commitment to innovation, customer-centric solutions, and operational excellence has enabled us to expand our loan portfolio to over USD 1.3 billion and our deposit balance to USD 1.0 billion, all while preserving financial stability.

Recognizing the transformative power of technology, we have made significant strides in digital innovation. The upgrade of our core banking system and ongoing enhancements to our digital banking services have streamlined access to financial solutions, making them more convenient and inclusive for our clients. Furthermore, investments in data analytics and cybersecurity have reinforced our operational resilience and strengthened customer trust. These digital advancements position LOLC Cambodia well to thrive in an increasingly digital economy.

Despite our expansion, LOLC Cambodia remains steadfast in serving low-income clients, with the number of group loans and microloans accounting for over 60% of our outstanding loans. Notably, 70% of our microfinance clients are women, with the majority residing in rural Cambodia. The microfinance sector accounted for approximately 20% of our total portfolio, with 80% of these loans issued without real estate collateral.

The average microloan size remains at USD 1,000. Meanwhile, the small, medium, and large enterprise segments, which constitute 80% of our total portfolio, have played a critical role in subsidizing our microfinance operations, allowing us to maintain the inclusive nature of our business model.

Commitment to ESG and Sustainability
LOLC Cambodia, we remain dedicated to environmental, social, and governance (ESG) principles, integrating sustainability into our operations through key initiatives:
 Participation in the United Nations Global Compact (UNGC): This underscores our commitment to sustainability by aligning our strategies with the UNGC’s universal principles on human rights, labor, the environment, and anti-corruption, as well as advancing the Sustainable Development Goals (SDGs).
 Strengthening our green financing portfolio to support environmentally sustainable projects.
 Enhancing financial literacy programs to empower underserved communities.
 Upholding the highest standards of governance and transparency in all our operations.
These efforts align with our mission to create a lasting positive impact on the communities we serve while ensuring sustainable growth and stakeholder value.

Regulatory Compliance and Operational Resilience
Cambodia remains fully compliant with all regulations and prudential ratios set by the National Bank of Cambodia. Our management and employees have demonstrated resilience and adaptability in navigating macroeconomic changes while maintaining strict adherence to all applicable laws and regulations.

Looking Ahead
As we move forward, we remain committed to fostering sustainable growth, embracing innovation, and delivering unparalleled value to our stakeholders. While challenges undoubtedly lie ahead, we are confident that our strategic focus, strong governance, and unwavering dedication will allow us to seize emerging opportunities and continue making a positive impact.

On behalf of the Board of Directors, I extend my heartfelt gratitude to all our stakeholders—including customers, investors, regulators, and banking and funding partners, both local and international—for their trust and support of LOLC Cambodia.

I would also like to express my appreciation to my fellow board members for their counsel and guidance, and to the CEO, Deputy CEO and the entire LOLC Cambodia team for their outstanding efforts and achievements. Lastly, my sincere thanks go to our shareholders for their unwavering support and confidence in our vision.

Together, we will continue to build a brighter and more inclusive future for all.