Microfinance institutions (MFIs) in Cambodia have restructured almost $500 million in loans for nearly 120,000 borrowers, a move the banks claim helped ease the burden on clients facing Covid-19 financial pressures.
Cambodia Microfinance Association (CMA) head of communications Kaing Tongngy said 137,158 clients had applied for credit restructuring as of Sunday. Of that, 118,182, or 90 per cent, were approved for $488 million.
He said the data collection was aimed at monitoring the impact of Covid-19 on clients, customer support for member institutions and the overall development of the microfinance industry to assess and submit reports to stakeholders.
“The CMA has been working hard with members and stakeholders, especially the National Bank of Cambodia, to assist affected clients,” he said. “The association welcomes any cooperation with parties who are truly willing to contribute to solving customer problems.”
Vithey Microfinance Plc director and CEO Bun Mony told The Post on Thursday that the outbreak had seriously impacted the microfinance sector. He said his bank saw a 3.5 per cent increase in bad loans.
“We suffered a financial hit last month. We started to lose money because nobody paid their debt. It was a serious blow, but we accept it because we understand the crisis. I have a lot of hope that the coronavirus pressures will ease next month,” said Mony.
MFIs may be able to restructure credit for clients if requested and pursuant to the contract between the institution and the client, The CMA said in a press release on Thursday.
Without the appropriate technical solutions, the situation could have a devastating impact on the economy as a whole, it said.
“The association continues to encourage and welcome customers who are affected,” said the CMA. “Please contact your lending institution or a credit officer directly to find an ideal solution.”
As of the end of March, the Kingdom’s MFIs logged $7.4 billion in outstanding loans to more than 2.2 million clients and $3.6 billion in deposits to more than 2.8 million clients, data from the CMA shows.