The Association of Banks in Cambodia (ABC) and the Cambodia Microfinance Association (CMA) have expressed support for suggestions the National Bank of Cambodia (NBC) has given to financial institutions to reduce the impact of Covid-19 on the local economy.

On Thursday, NBC asked banks and microfinance institutions (MFIs) to continue disbursing loans and possibly suspend interest payments for businesses impacted by the outbreak of the novel coronavirus, especially in the tourism industry.

In a joint press release issued on Monday, ABC and CMA said they agreed with NBC’s recommendations and with the way the government is handling the fallout from the outbreak.

Its press release said: “ABC and CMA encourage all members – including banks, microfinance deposit-taking institutions, microfinance institutions, financial leasing institutions and rural credit institutions – to implement the recommendations fully.

“The two associations have been working with the Ministry of Economy and Finance and the SME Bank to provide financing to small- and medium-sized enterprises (SMEs) in priority sectors with affordable interest rates.”

Speaking at the inauguration ceremony for National Road 55, Prime Minister Hun Sen urged financial institutions to show solidarity towards borrowers affected by the outbreak.

“Banks and microfinance institutions should consider extending the deadline for repayment or suspending interest payments for those who have lost their jobs,” Hun Sen said, adding that less than 20,000 Cambodians nationwide find themselves in this situation.

According to a 2019 report from the NBC, Cambodia has 46 commercial banks, 15 specialised banks and 82 MFIs. There are also 248 rural credit operators, 15 leasing companies and 20 payment service providers.

Banks’ outstanding loan portfolio reached $24.5 billion last year while deposits stood at $25.5 billion. Among MFIs, loans reached $7.2 billion and deposits $3.9 billion.