Financial institutions that are members of the Cambodia Microfinance Association (CMA) restructured more than $1.720 billion in loans for over 350,000 borrowers as of October 31, as applications steadily decline with Covid-19’s loosening grip on the Kingdom.

The number of applicants for credit restructuring during the period was nearly 380,000, translating to a 94 per cent approval rate, CMA reported.

CMA Communications Department director Kaing Tongngy told The Post that the number of loan refinancing requests rose sharply in May and June, at up to 10,000 a week, but by end-July, that figure had dropped to just one hundred a week.

“In the last 10 weeks, the number of applications has been between 100 and 500 per week. Based on this data, we can gauge that the impact of Covid-19 has largely subsided and that the Cambodian economy is recovering slowly,” he said.

However, he noted that, to prevent future shocks, the CMA would continue to pay close attention to the various trends in the sector.

At the same time, Hout Ieng Tong, president and CEO of Hattha Bank Plc, a member of the CMA, told The Post that the bank’s approval rate of restructuring proposals was almost 100 per cent, and underscored that the process had made things far easier for citizens and banks during Covid-19.

“The number of customers requesting loan restructuring at our bank is no longer as large as before. Loan restructuring gave some customers time to save cash and strengthen their businesses,” he said.

The government’s reopening plans are “the most gratifying thing” for banking and microfinance, he said, underlining that the health of the sector hinges on the overall economic situation.

However, the CMA’s Tongngy noted that the credit restructuring policy is due to expire by end-2021.

On the flip side, the entire financial community is making every effort to extend the policy, studying with the relevant institutions, he said, adding that many clients are still affected by the economic fallout of Covid-19.

In March last year, following the outbreak of Covid-19, the National Bank of Cambodia (NBC) issued a circular allowing all banking and microfinance institutions to provide credit restructuring services to alleviate the hardships of the people due to the pandemic.

In January-June, the Kingdom’s banking and financial institutions restructured 22.2 trillion riel ($5.5 billion) in loans for 367,239 borrowers, according to the NBC.