ABC, CMA call for stability in response to loan portfolio report

ABC, CMA call for stability in response to loan portfolio report

The Cambodian Banking Association (ABC) and the Cambodian Microfinance Association (CMA) have collectively affirmed the stability of the banking sector in response to a recent Credit Bureau Cambodia (CBC) report detailing a near $60 billion loan portfolio.

The ABC and CMA have emphasized the stability of the loan portfolio, providing a clarification on the current state of the banking industry in Cambodia.

The move was made after recent discussions surrounding the CBC report, which detailed a loan portfolio of nearly $60 billion across banking and financial institutions.

Sok Chan, spokesperson for the ABC, affirmed on March 21 the reported loan figure of approximately $60 billion as of the end of 2024, representing loans and credits from institutions licensed by the National Bank of Cambodia (NBC).

He further clarified that loan growth had slowed significantly, increasing by only 3 percent compared to the 5 percent growth observed in 2023, citing that this portfolio was distributed across more than 4 million accounts, serving approximately 5 million customers.

Chan attributed the decelerated growth to both supply and demand factors.

On the demand side, the sluggish recovery of key sectors, including construction, real estate, tourism, and wholesale/retail, has dampened borrowing activity. On the supply side, financial institutions have adopted a more cautious approach to lending amid regional and global economic uncertainties, ABC’s spokesperson said.

Despite the slowed credit growth, Chan highlighted the robust growth of customer deposits, which surged by 16.3 percent to reach $57 billion by the end of 2024.

He underlined the strong capital position and high liquidity of the banking system, indicating its resilience and stability.

“Loan disbursement across various sectors is a positive sign, as long as the use of credit is productive and the quality of credit remains manageable,” he said.

Credit has been disbursed directly to productive sectors such as manufacturing, SMEs, agriculture, transportation, and personal mortgages.

The non-performing loan (NPL) rate, while experiencing a slight increase to approximately 6 percent, remains within manageable level, he added.

The Cambodian Microfinance Association (CMA) echoed these sentiments, highlighting the sector’s resilience and commitment to responsible lending practices.

Credits from CMA’s members are provided to customers in various sectors, such as retails, real estate trading, personal lending, construction, agriculture, forestry and fishing, wholesale trade, manufacturing, hotels and restaurants, and others, said CMA’s Head of Communication spokesperson Kaing Tongngy.

According to CBC’s report, credits in Phnom Penh, Kandal, and Siem Reap were high due to these areas being clusters of economic activity and having large populations.

Cambodia has 59 commercial banks, nine specialised banks, 85 microfinance institutions, and 114 rural credit institutions, with 23.3 million deposit accounts and 4 million credit accounts, read the report.

khmertimeskh