The total amount of loans at Cambodia’s microfinance institutions (MFIs) continued to grow in the post-election period, climbing 9 per cent in the third quarter of this year when compared to the previous quarter that finished at the end of June. Deposits declined slightly.

Loans at Cambodia’s 35 microfinance institutions reached close to $1.2 billion at the end of September, a slight rise from the $1.08 billion at the close of the second quarter, data from the Cambodia Microfinance Association (CMA) released last weekend show.

But total deposits declined 3.5 per cent, from $378 million at the end of June to $365 million through September.

Referring to the deposits, Bun Mony, president of CMA, said customer sentiment was affected by uncertainty after the disputed elections in July, which accelerated withdrawals.

“Some are worried about the situation and come to withdraw their money,” Mony said. “But it is not serious and the next quarter will be good.”

The rate of non-performing loans (NPLs), or loans that aren’t being paid back on time, was low. NPLs 30 days over the deadline represented just 0.3 per cent of total loans.

Local deposits make up the pool of cash from which MFIs can give out loans, and experts said a drop in deposits forces the industry into higher dependency on loans from abroad.

Mey Kalyan, adviser at the Supreme National Economic Council, said this will temporarily widen the gap between loans and deposits, but not so wide that it becomes problematic.