Small business loan balance hits over $37 billion in Q4 2025

Small business loan balance hits over $37 billion in Q4 2025

As Cambodia steps into 2026, the $37.12 billion small business loan balance highlights both the resilience of the SME sector and the importance of prudent credit management, particularly as businesses navigate slower growth and tightening financial conditions.

Cambodia’s small business loan balance climbed to $37.12 billion by the end of the fourth quarter of 2025, reflecting steady credit expansion despite mixed trends in loan applications and rising concerns over credit quality, according to the latest Small Business Credit Index released by Credit Bureau Cambodia (CBC) yesterday.

The report, covering the October-December 2025 period, shows that overall loan balances grew 2.6 percent quarter-on-quarter, driven largely by working capital loans, which accounted for more than 65 percent of total outstanding balances. This underlines the continued reliance of Cambodian small and medium-sized enterprises (SMEs) on short-term financing to support day-to-day operations amid cost pressures and uncertain demand.

While the total loan book expanded, small business credit applications presented a more cautious picture. The number of credit applications increased by 4.5 percent quarter-on-quarter, following several quarters of contraction earlier in 2025. However, the total value of applications rose more modestly, suggesting that businesses are borrowing selectively rather than aggressively expanding.

By product type, working capital loans dominated both application volume and loan performance, followed by agriculture and asset finance. Construction-related lending continued to lag, reflecting ongoing weakness in the property and building sectors. Regionally, loan balances expanded across the Coastal Plain, Plateau and Tonle Sap regions, with the Plateau recording particularly strong growth in agriculture-related balances.

The CBC data also points to a gradual increase in credit risk. The 90+ days past due (DPD) ratio for small business loans stood at 7.1 percent, with construction and working capital loans showing relatively higher delinquency levels. Businesses holding multiple loan accounts were found to be more vulnerable to repayment stress than those with a single lending relationship, a trend CBC says warrants close monitoring by lenders.

Despite these risks, the overall performance of small business lending remained stable. The number of active loan accounts reached 1.77 million, while loan account growth remained positive across most product categories, indicating that financial institutions continue to support SME financing as a key pillar of economic activity.

CBC noted that the Small Business Credit Index is designed to provide a comprehensive snapshot of Cambodia’s SME credit market, covering credit applications, performance and quality based on data submitted by member financial institutions. The bureau emphasised that the figures reflect underlying economic conditions and should be interpreted as an indicator of market trends rather than forward-looking guidance.

As Cambodia moves into 2026, the $37.12 billion small business loan balance highlights both the resilience of the SME sector and the importance of prudent credit management, particularly as businesses navigate slower growth and tightening financial conditions.

khmertimeskh