Japanese online financial services group SBI Holdings Inc last week announced that it will acquire a 70 per cent stake in a Cambodia-based Ly Hour Microfinance Institution Plc (LHMFI) in a bid to re-enter the Kingdom’s banking sector, Japan-based Kyodo News Group’s economic news site NNA Asia reported.

Citing a statement from SBI Holdings released on Wednesday, NNA Asia reported that the National Bank of Cambodia (NBC) approved the acquisition on October 9.

LHMFI is expected to be granted a banking licence shortly by the NBC to expand its business from its current services targeted at retailers, said the statement.

SBI Holdings will initially acquire about 14.94 million shares in LHMFI from its existing shareholders by November 25 and purchase an additional 37.56 million shares on December 23, it said.

The acquisition will carry an $81.7 million price tag and will transform the microfinance institution (MFI) into a commercial bank, which will operate under the new name – SBI Lyhour Bank Plc.

LHMFI chairman Ly Hour declined to disclose further details on Monday, saying “the deal is still under process”.

Cambodia Microfinance Association chairman Kea Borann told The Post on Monday that the deal is a sign of foreign investors’ increased confidence in the Kingdom’s economic growth.

“I think our country’s MFI sector is showing strong growth. The sector is one of the backbones helping to boost economic growth. I think that [if LHMFI] becomes a bank, it can provide more services than as an MFI,” he said.

With competition heating up in the Kingdom’s crowded financial market, Borann believes that mergers will become more prominent in the industry.http://https://www.phnompenhpost.com/business/nna-asia-sbi-holdings-set-buy-70-stake-ly-hour-mfi