NBC alerts of potential financial losses against illegal loans
NBC alerts of potential financial losses against illegal loans
The National Bank of Cambodia (NBC) Tuesday warned the public against the availing illegal loan services, emphasizing the potential financial losses and significant risks.
Addressing a presser, NBC Governor Chea Serey highlighted the dangers associated with borrowing from unlicensed lenders, noting that such practices often involve exorbitant interest rates, hidden fees and deceptive terms and conditions.
These factors can lead to a cycle of debt that is difficult to escape, resulting in substantial financial hardship for borrowers, she added.
“People should be careful because during this period, there are many who instead of taking the opportunity to borrow from banks, are turning to borrowing from the unregulated borrowers,” she said.
Serey said that individuals should only borrow from reputable financial institutions that are licensed and regulated.
The NBC’s warning comes in response to a growing concern about the prevalence of illegal lending activities in Cambodia on social networks such as Facebook, Telegram and TikTok.
Sok Voeun, CEO of LOLC (Cambodia) Plc and Vice Chairman of the Cambodia Microfinance Association (CMA), said that recently scammers have used phone calls to customers to ask them to pay through them through scammed bank accounts or via Wing or QQ code, with promises that customers do not have to pay for 6 months or 1 year.
“Customers have to verify by making calls for more information from the institutions or credit officers to confirm,” he said.
NBC advised individuals to carefully review loan contracts and understand all the terms and conditions before signing any agreements.
The central bank also encouraged borrowers to report any suspicious or fraudulent lending activities to the appropriate authorities.
Outstanding loans increased by 2.6 percent year-on-year to $58.9 billion by June this year, while customers’ deposits rose by 13.4 percent to $51.9 billion, according to the biannual report of the National Bank of Cambodia released in July.
Loans had been given to main sectors such as trade, housing, construction and real estate, agriculture, hotels and restaurants and manufacturing among others, it said.
Non-performing loans (NPLs) at the banks and the microfinance institutions were at controllable rates of 6.8 percent and 8.3 percent, respectively, it added.
The report said the current assets in the Kingdom’s banking and financial system rose to $88.3 billion by June 2024, up 6.1 percent from June 2023.
