57K people benefit as banks, MFIs restructure $850M in loans
57K people benefit as banks, MFIs restructure $850M in loans
Nearly 57,000 loan accounts benefitted as banks and microfinance institutions (MFIs) have restructured loans worth over $850 million as of November 2024, according to the National Bank of Cambodia (NBC).
The move follows NBC’s directives in August to financial institutions to make loan restructures without any restrictions, with interest rates remaining the same for customers who face cash flows.
The new measures are valid until the end of 2025.
This figure represents approximately 1.5 percent of the total outstanding loans in the country, said Mak Reaksmy, Director of Regulatory Policy and Risk Assessment Department of the National Bank of Cambodia.
“Some 57,000 loan accounts have been restructured with a combined worth of $850 million in the three-month period of this year,” Reaksmey said during a roundtable discussion on the debt situation in Cambodia at the Royal Academy of Cambodia held last week.
The above data shows that loan restructuring at this stage is still low compared to the Covid-19 pandemic, which was over 10 percent of the total outstanding loans, she added.
The situation of the banking sector in Cambodia remains strong, despite the increase in loan restructuring while the decline in lending, and the increase in non-performing loans, Reaksmey said.
Toch Chao Chek, member of the Board of Directors of the Association of Banks in Cambodia (ABC) said credit restructuring has helped to restore the situation of customers to normal.
“Approximately 80 percent of those who have received credit restructured from the bank are able to repay the bank regularly,” he said.
The NBC will closely monitor loan restructuring as well as credit interest rates. In addition, the NBC also requires all banking and microfinance institutions to submit weekly loan restructuring reports.
Reaskmey said the number of requests for credit restructures would increase in months to come as the implementation of the central bank’s direction has just been short, only three months, while some borrowers who are unable to repay do not want to apply for loan restructuring for fear of being listed in the Credit Bureau Cambodia.
According to an NBC report, outstanding loans rose by 13.8 percent year on year to $58.6 billion by June this year, while customers’ deposits increased by 6.4 percent to $44.4 billion.
The 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.
