Kingdom’s retail credit reaches over $15 billion
Kingdom’s retail credit reaches over $15 billion
Cambodia’s retail credit market continued to expand in the fourth quarter of 2024, with outstanding balances reaching $15.53 billion, a 0.46 percent increase from the previous quarter, according to a report by Credit Bureau Cambodia (CBC) released on Thursday.
However, retail credit applications, which reflect consumer demand for personal finance, credit cards, and mortgages, declined by 16 percent overall. Personal finance applications saw the largest drop at 17 percent, with the plain region experiencing the sharpest decline at 19 percent. Credit card applications fell by 25 percent, with the most significant decrease of 27 percent also in the plain region.
Mortgage applications showed a smaller decline of 3 percent, with the plateau region seeing the largest decrease at 10 percent.
The total loan amounts sought through applications contracted by 20 percent, compared to a 2 percent increase in the previous quarter. Personal finance applications saw a 22 percent reduction, credit card applications fell by 17 percent, and mortgage applications dropped by 11 percent.
Despite declining application rates, retail loan accounts continued to grow, increasing by 0.83 percent quarter-on-quarter to reach 2.04 million accounts nationwide. Personal finance loans comprised the majority at 81.93 percent, followed by credit cards at 8.06 percent and mortgages at 10.01 percent.
Growth was observed across all regions, with plateau and coastal regions experiencing the highest increases at 2.1 percent and 2.0 percent, respectively. The plain region saw a more modest growth of 0.5 percent, while Tonle Sap recorded a 1.2 percent increase.
Retail loan balances continued to rise, reaching $15.53 billion by December 2024. Mortgage loans, despite accounting for only 10.01 percent of total loan accounts, represented the largest share (51.25 percent) of the outstanding loan balance. Personal finance loans accounted for 47.36 percent, while credit card loans remained low at 1.39 percent.
Positive growth was observed in all regions, with the Tonle Sap region recording the highest increase at 2.2 percent, followed by plateau at 2.1 percent, coastal at 0.8 percent, and plain at 0.03 percent.
Retail credit quality, measured by the percentage of loan accounts overdue by more than 30 days (30+ DPD), improved slightly. The 30+ DPD ratio stood at 6.24 percent, down from 6.35 percent in the third quarter of 2024. Credit card loans had the highest delinquency rate at 7.90 percent. The total overdue amount decreased by 1.3 percent, with the largest decline observed in the Tonle Sap region (-5.0 percent), followed by the Coastal and Plateau regions (-3.0 percent each), and the Plain region (-0.1%).
The majority of customers (70.30 percent) held credit accounts with only one financial institution, while 29.70 percent had relationships with multiple institutions. In terms of loan distribution, 59.92 percent of customers had only one loan account, 27.59 percent held two, 9.16 percent had three, and just 3.33 percent managed more than three accounts.
Despite a decrease in demand for new credit, the overall retail credit market remained active, with an increase in loan accounts and balances.
The ongoing growth suggests a resilient financial sector that continues to expand despite fluctuations in consumer demand. The CBC report also noted improvements in loan quality and a decline in overdue loan amounts across regions.
“The demand for retail credit decreased in terms of applications and loan amounts, but overall retail credit performance remained positive, with growth in both the number of loan accounts and outstanding balances,” said Oeur Sothearoath, CEO of CBC.
He also noted that loan quality improved compared to the previous quarter, with a reduction in 30+ DPD ratio from 6.35 percent to 6.24 percent.
