Consumer credit in Cambodia continued to grow during the second quarter of this year, although at a more moderate pace with loan applications decreasing, according to the latest report from the Credit Bureau Cambodia (CBC).

According to the report, the total number of consumer loan applications in the second quarter of this year was around 300,000, a 15 percent decrease compared to the first quarter. Meanwhile, consumer credit, comprising of personal finance, credit cards and mortgage loans, increased by 6.6 percent compared to the first quarter.

Total outstanding loans reached $3.87 billion across 785,000 current account holders.

Despite the increase in consumer loans, CBC CEO Sothearoath Oeur highlighted the slight uptick in non-performing loan (NPL) rates. The NPL rate across the sector increased from 1.6 percent to 1.7 percent compared to the first quarter of this year.

“Although the [number of] non-performing loans has started to increase, it is still low and manageable,” he said in the report. “But, it can be a sign for all players to be cautious about the quality of their loans.”

Ngeth Chou, senior consultant at Emerging Markets Consulting, said a 6 percent growth in consumer credit was a positive sign.

However, he warned that loans for personal finance should remain below double digit growth as they do not generate sound economic activity. “Most of our consuming goods are imported,” he said. “So, the more we spend on this, the more money flows out of our country.”