Cambodians more prompt at loan repayments, cheque defaults drop
Cambodians more prompt at loan repayments, cheque defaults drop
Cambodians have become more prompt at loan repayments post-Covid, with the cheque default rate dropping in 2023, as per data with the National Bank of Cambodia (NBC).
When it came to dishonoured cheques there were only 798 such occurrences, connected to 479 loan accounts, with an outstanding balance of KHR 166.5 billion ($40.8 million) in 2023, as per the NBC report which is sourcing its data from the Credit Bureau of Cambodia (CBC). This is drastically lower than dishonoured cheques in 2022 – that came to 7,080 occurrences, linked to 4,468 loan accounts with an outstanding balance of KHR 2,016.1 billion ($489.7 million).
In 2021, dishonored cheques were about 3,925 transactions, linked to 2,440 loan accounts with an outstanding balance of KHR 845.2 billion ($207.5 million).
The NBC said the CBC had generated 6.3 million loan reports in 2023. CBC officials in a recent event told Khmer Times that the demand for CBC’s reports among both banks and borrowers shows that institutions and individuals are keen on seeing their financial history.
NBC said of 6.3 million reports generated – 3.1 million were from commercial banks (49.5 percent), 2 million from microfinance deposit-taking institutions (32.1 percent), 866,600 from MFIs (13.7 percent), 130,200 thousand from specialized banks (2.1 percent), 119,600 from financial lease institutions (1.9 percent) and 49,600 from rural credit institutions (0.8 percent).
The NBC also said that it is keen on more active monitoring of loan repayment and financial health in Cambodia. And that it has instructed CBC and its members to verify the loan accounts of customers whose members have not made enquiry (non-inquiry loan account) since January 2023.
To lower the risk of corporate loan defaults, NBC said that it is taking measures to improve cross-border financial reporting to avoid losses. NBC said in this regard it has permitted CBC to sign an MoU with its Singaporean counterpart, the Credit Bureau Singapore (CBS) for cross-border credit reporting.
Apart from this, NBC has also allowed CBC to conduct a pilot for embedding data from Cambodia’s insurance companies into the CBC’s reporting system between July and December 2023.
For faster loan disbursement for loans below $50,000, NBC has made it possible by approving the integration of a digital real estate appraisal ‘Indication Plus Platform’ into CBC’s Web Enquiry.
CBC now calls this VTrust Appraisal. The CBC has also indicated that in future it might look at alternative data sets such as prompt payment of phone bills, electricity, etc. CBC said that by looking at such alternative data sets it can better help banks assess new-to-credit customers.
