Kingdom’s credit balance hits nearly $60B

Kingdom’s credit balance hits nearly $60B

The credit balance in 2024 totalled nearly $60 billion, with over 5 million users across 25 capitals and provinces, according to a report released by Credit Bureau Cambodia (CBC) on Saturday.

CBC’s Loan Situation Report 2024 compiled data on individuals, companies, and enterprises from all 197 CBC member banks and financial institutions. The report highlights key aspects of the credit market, including credit balances, market size, credit quality, the number of banking and financial institutions, and the volume and number of restructured loans borrowed by customers across provinces.

According to the report, the total credit balance in 2024 amounted to 236,429,266 million riels (approximately $59.1 billion), with 5.04 million borrowers nationwide. Of this, Phnom Penh, Kandal, and Siem Reap collectively accounted for about 60 percent of the total credit balance.

Phnom Penh recorded the highest credit balance at 119,021,947 million riels, representing 50 percent of the nationwide total, with 696,000 borrowers.

Kandal followed with 12,697,649 million riels (5 percent of the total) and 394,000 borrowers. Siem Reap ranked third, with a credit balance of approximately 10,307,358 million riels (4 percent of the total) and 324,000 borrowers. The provinces with the lowest loan volumes were Mondulkiri, Pailin, and Kep.

In terms of credit quality, the overall rate of late repayments 90 days past their due date (90+ DPD)—stood at 6.03 percent by the end of 2024. The provinces with the lowest 90+ DPD rates were Svay Rieng (3.51 percent), Prey Veng (4.84 percent), Takeo (5 percent), Kep (5.11 percent), and Kampong Cham (5.45 percent).

Among provinces and capitals with the highest loan utilization rates (above 60 percent), the average 90+ DPD rate was 5.73 percent. Key provinces in this category included Kampong Speu (6.89 percent), Kampong Thom (6.68 percent), Preah Vihear (6.01 percent), Preah Sihanouk (5.57 percent), and Svay Rieng (3.51 percent).

Overall, approximately 76 percent of individuals and enterprises borrowed from only one banking or financial institution, while 20 percent took loans from two institutions, and 4 percent borrowed from three. Tbong Khmum, Mondulkiri, and Kep had the highest rates of single-institution borrowing, exceeding 80 percent, which is considered a positive indicator.

Currently, CBC collects credit data on individuals, companies, and enterprises nationwide from member banking and financial institutions, CBC stated in the report.

“Each member institution can use this data to assess customers based on their credit history—including loan amounts, lending institutions, declared income, and personal details such as name, date of birth, and address—to reduce credit risk and facilitate faster loan approvals for borrowers with strong credit histories,” the report stated.

“The Loan Situation Report 2024 aims to provide the public, especially stakeholders, with a comprehensive understanding of the annual credit outlook in Cambodia’s banking and financial sector,” it added.

Kaing Tongngy, a spokesman for the Cambodia Microfinance Association (CMA), told Khmer Times that while microfinance loans account for only 10 percent of the total credit balance in Cambodia, they represent a significant share of the country’s borrowing population.

“If we look at the credit balance, microfinance loans account for only 10 percent of the total credit balance. However, in terms of the number of loan users, the microfinance sector accounts for 40 percent of total borrowers,” he said.

Despite concerns about the sector’s impact on household debt, Tongngy emphasized that CMA remains committed to maintaining financial stability and ensuring responsible lending practices. “As an association, we continuously monitor the sector’s evolution, not only by tracking data but also by overseeing implementation. We take proactive measures and implement various tools to mitigate risks and ensure the sector’s financial sustainability,” he stated.

He pointed to the introduction of specific regulations designed to prevent over-indebtedness. “One such tool is the Lending Guideline, which has been introduced to monitor overlapping loans and manage the risk of excessive debt,” he added.

With rising concerns over non-performing loans, Tongngy highlighted the sector’s recent efforts to strengthen risk management. “Over the past two to three years, monitoring and strengthening our credit system has been a top priority for the sector to ensure better control over loans at risk or non-performing loans,” he said.

Regarding liquidity, Tongngy noted that while microfinance loans have grown by only one percent, deposits have increased by 14 percent. “This indicates that the microfinance sector has sufficient liquidity to issue loans while simultaneously strengthening its credit provision,” he said.

Chea Serey, Governor of the National Bank of Cambodia (NBC), stated recently that credit in the banking sector continues to grow, though at a slower rate. She attributed this slowdown to both demand and supply factors. On the demand side, the sluggish recovery of key sectors such as construction, real estate, tourism, and wholesale and retail has led to a decline in borrowing.

On the supply side, banks and financial institutions have become more cautious in lending due to increased uncertainty in regional and global economies, she explained.

Despite this, deposits saw strong growth of 16.3 percent, supported by a solid capital base and high liquidity. This reflects the banking system’s resilience and the continued trust of the public, she added.

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