Microcredit banking practice: insights from a Cambodian Microfinance Institution

The aim of this study is to investigate the drivers of the supply of loans and of the long term relationship in microcredit banking activities. Dataset is based on primary data collected by in-house interviews of a Cambodian MFI’s random selected borrowers. We used a OLS regression technique to perform our analysis.The results confirm a positive and significant impact of the value of real estate assets and of loan purposes on the amount borrowed and a negative impact of being single as a civil status.We found that a long run relationship is positively affected by the age of the borrower, the purpose of the loan and negatively related with a female gender.Despite the general wisdom microcredit is targeted to the “poorest among the poor people”, this is completely consistent with a sound and safe (micro)banking activity aimed to a long term relationship with clients and their welfare protection.