Cash infusion set for financial sector
Cash infusion set for financial sector
The government will disburse between $500 and $600 million in low-interest loans to financial institutions to enable them to provide loans to businesses at lower interest rates.Speaking at a press conference at the National Assembly on Monday, Prime Minister Hun Sen said the move aims to alleviate the Covid-19 pandemic’s impact on the Kingdom’s enterprises.
“We are evaluating the ability of the government to disburse between $500 million and $600 million to the banks at low interest rates. This will allow them to issue loans to business owners with low interest rates too.
“The state cannot give direct loans to businesspeople, but we can give loans to commercial banks at low interest rates,” he said.
Prasac Microfinance Institution Ltd (Prasac) executive vice-president Say Sony welcomed the government’s move, saying business has been slow in the midst of the Covid-19 pandemic.
“It is a great government intervention which will support the banking sector. We have to continue our lending business and it’ll enable our clients to access the financial services they need to restart their business activities when the situation returns to normal.
“To support the government initiative, we will apply for the loan and diversify our existing source of funds to support our clients’ businesses.
“Our current business has been running well for the past three months. Our portfolio has grown about eight per cent from $2.501 billion in December to $2.725 billion this month.
“Our non-performing-loans have slightly increased from 0.36 per cent to 0.48 per cent due to the Covid-19 situation. However, our deposits grew about 2.25 per cent from $1.778 billion to $1.828 billion,” Sony said.
The National Bank of Cambodia (NBC) on Friday issued a directive to all banks and financial institutions to restructure credit for loans in four priority sectors, a move lauded by the private sector.
The directive aims to maintain financial stability, support economic activity and ease the burden of debtors facing declining revenues during the ongoing Covid-19 outbreak.
The four priority sectors cited by the NBC were tourism (including food and beverage, as well as other support services), garments (including employees), construction (exclusively for first house purchasers, shops and first mortgages) and transport (especially taxi drivers and tuk-tuk drivers) and logistics.
The NBC defined “credit restructuring” as an amendment to the terms of the original credit agreement, which provides more favourable conditions for clients who are experiencing real financial difficulties.
There are 43 commercial banks currently operating in the Kingdom (15 locally incorporated banks, 15 subsidiaries, and 13 foreign bank branches), 14 specialised banks (one state-owned and 13 private) and seven microfinance deposit-taking institutions.
