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Rise of housing loans

Photograph: Phnom Penh Post

Although costs can be high for borrowing and it can be difficult to pay regularly every month, the trend of borrowing from banks by Cambodian people to buy property is still steadily increasing, according to experts.

Keuk Narin, vice president of Asia Real Estate Cambodia, said people are increasingly aware about using a loan from a bank to buy their house and other products, compared to last year.

He says that while there are pros and cons of using bank loans, if a loan is taken out to generate money or regular revenues, it is a good thing. However, if borrowers don’t clearly think about revenues, it can have a negative impact.

“Borrowing is good or bad, depending on individuals’ revenues and economy. Therefore, carefully considering potential revenue is very important,” said Keuk, adding that persuading customers to take out loans is part of what banks do, but if a borrower can’t pay off the debt, it will lead to trouble.

Interest rates in Cambodia are higher than in other neighbouring countries like Thailand and Singapore, he noted.

However, it is lower than in previous years, when there were also complicated procedures for borrowing.

Leng Oun, CEO of Leng Oun Group, a real estate services company, said borrowing money to buy a house is good for peoples’ long term future, but “it would be better if customers have their own money, about 50 to 70 per cent to buy the house, and borrow the remainder from the bank in order to ensure economic stability in families”.

“Although we can have regular or irregular incomes, we still have the same risks when we borrow from a bank,” he said. “However, I noticed that this year the numbers of people borrowing money to buy houses has risen between 10 per cent to 15 per cent from a year earlier”.

Sung Bonna, director of Bonna Realty Group and president of Cambodian Valuers and Estate Agents Association, agreed, saying there are pros and cons to housing loans.

“The culture and the trend of using bank loans among Cambodian people is changing. Previously, there were only about two out of 10 people who borrow money from banks, now there are three to four people using bank loans,” he said.

During first eight months of this year, ACLEDA Bank has provided housing loans to 4, 000 clients valued at $88 million, compared with $70 million in the previous year, according to So Phornary, deputy executive director of ACLEDA Bank.

To contact the reporter on this story: Siv Meng at



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