Cambodia Microfinance offering 8.50% interest?

[Silvio]

Came across this
https://www.lolc.com.kh/eng/Deposit.aspx
How come they are offering such high deposit rates - 5.25 to 8.50%?
What's the catch?

 

[anotherone]

There is a rule in the banking industry. The smaller your loan is and the highest the rate is.

 

[Nicholas Van Orton]

Anyone has any experience to share with this bank? Thanks @maxmmm for bringing this up

 

[Martin Everson]

maxmmm said:
What's the catch?
Click to expand...

You don't get your money back...ever smi(&%

Website makes no sense. I mean a loan of up to $10,000 at a 1.5% loan rate on USD. Is this a free money bank? How are they calculating these interest rates? conf/(%

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[daxbr]

Martin Everson said:
You don't get your money back...ever smi(&%

Website makes no sense. I mean a loan of up to $10,000 at a 1.5% loan rate on USD. Is this a free money bank? How are they calculating these interest rates? conf/(%
Click to expand...

Now only to mantain net capital req to make more predatory loans, but few years ago aba paid 10% for 1 years USD cd. Bunch of retirees did quite well.

 

[Martin Everson]

I really don't understand their business model as a microfinance bank making almost free loans.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[Silvio]

Yes, indeed very weird - paying rates of 8.50% while loaning at 1.50%.

It's possible that 1.50% is just a fake number to attract people ("*starting from* 1.50%") while in fact most people pay a lot higher rates as the bank will deem them more "risky"

 

[Martin Everson]

maxmmm said:
It's possible that 1.50% is just a fake number to attract people ("*starting from* 1.50%") while in fact most people pay a lot higher rates as the bank will deem them more "risky"
Click to expand...

The average microfinance loan in these developed countries maybe 35% or something. So they are really low balling the figure to get people in through the door if thats the case. Maybe they calculate the loan rate on a weekly basis i.e 1.5% a week which would make more sense.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[daxbr]

Martin Everson said:
I really don't understand their business model as a microfinance bank making almost free loans.
Click to expand...

https://www.reuters.com/article/us-...r-debts-land-losses-in-cambodia-idUSKCN1UW1XW

 

[CambodiaPro]

Silvio said:
Yes, indeed very weird - paying rates of 8.50% while loaning at 1.50%.

It's possible that 1.50% is just a fake number to attract people ("*starting from* 1.50%") while in fact most people pay a lot higher rates as the bank will deem them more "risky"
Click to expand...

It's 1.5% a MONTH compounding and plus other fees.

It works out well over 20%

 

[twgtrading]

CambodiaPro said:
It's 1.5% a MONTH compounding and plus other fees.

It works out well over 20%
Click to expand...

Yes. In Cambodia, the rates interest lending is per month.

Super high charges.

 

[JohnLocke]

They are still around making me think they may know what they are doing.

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