A Case Study on ACLEDA Bank Plc. : Making Commercial Microfinance Work in Cambodia

*Available in digital version only
21 Oct 2015
The case describes the rise of ACLEDA as a Cambodian microcredit project start-up that transformed into an NGO, later converting into a specialised bank and finally transforming into a private commercial bank with a strong microfinance orientation. ACLEDA Bank adopted a business model that focuses on the viability, sustainability and profitability of the bank through the provision of superior financial services to all segments of the community, particularly to micro, small and medium entrepreneurs and a no-nonsense focus on commercial banking operations. The case focuses on institutional transformation, which includes organisational sustainability, financing and customer segmentation and services. As the structure of a microfinance-oriented institution becomes more complex, new issues emerge such as those relating to regulations (operations, compliance and ownership), borrowings, appropriate financial products and services, competition, capacity building, organisational culture, leadership, participatory decision-making and stakeholder involvement. While ACLEDA Bank is focused on profit maximisation as a basis for its growth, it is also mindful of the social and environmental dimensions of its services and their impact on individuals and society as a whole. ACLEDA Bank puts a premium on developing and offering appropriate products and services, broad-based ownership of the bank, expanding the target group and geographic locations, increasing the impact on clients, transparency and disclosure, client protection, as well as sensitivity to gender, race and human rights. ACLEDA has also strived to become a progressive employer, noting that satisfied employees translate into longer-lasting provision of sustainable services. The case study ends with a question: should ACLEDA Bank transform again from its current institutional structure into a full public bank?