Promoting home purchase in Cambodia

First Finance is Cambodia’s first, and so far only, financial institution specialising in granting loans for home purchase. Established in 2009 it has a clientele of lower middle-class homebuyers, who have limited access to bank loans for their first home.

Its customers are drawn from employees at low pay grades in the private sector and civic organisations. It also makes loans to small entrepreneurs.

So far the company has granted home loans to about thousand families. In addition to long-term loans for house purchase it provides shorter term credit for home renovation and acquiring furnishings.

Finnfund is supporting First Finance by investing in its convertible bonds. This will allow the company to expand its operations into the provinces of Cambodia and create new jobs.

It is Finnfund’s first direct investment in Cambodia, one of the poorest countries of Southeast Asia.

Growth of home loan financing will promote the economic and social development of Cambodians. A housing loan can lift the living standards of poor families and a decent home makes it easier to hold down a job and educate the children.

It is hoped that the success of First Finance will encourage other finance companies to enter the field, increasing the supply of loans and creating competition that will benefit homebuyers.

Growth of the housing market will also create jobs in construction, building materials and related occupations like transport, and the expansion of enterprise will boost tax revenue vital for Cambodian development.