Logo of Phnom Penh Post newspaper Phnom Penh Post - NBC: Financial institutions in H1 restructure $5.5 billion in loans

NBC: Financial institutions in H1 restructure $5.5 billion in loans

Content image - Phnom Penh Post
Financial institutions have restructured 22.2 trillion riel ($5.5 billion) in loans for 367,239 borrowers in the period from January-June. Heng Chivoan

NBC: Financial institutions in H1 restructure $5.5 billion in loans

The Kingdom’s banking and financial institutions have restructured 22.2 trillion riel ($5.5 billion) in loans for 367,239 borrowers in the first half of this year, to ease the burden on the public as the ongoing coronavirus outbreak dampens economic activity, according to the National Bank of Cambodia (NBC).

Cambodia Microfinance Association (CMA) Communications Department director Kaing Tongngy told The Post that the CMA’s 114 financial institution members – including four banks – had restructured more than $1.664 billion in loans for 348,094 clients as of July 11.

At the beginning of the year, the number of loan restructuring applications were fewer than 1,000 per week, but that figure jumped sharply after the third coronavirus outbreak – dubbed the “February 20 community event” marking the date it was first detected – peaking in April-May at around 20,000, before easing back over subsequent months to about 2,000 in the last week, he said.

“Credit restructuring has eased the cash burden and repayment terms of the affected customers – severely and moderately – helping them to keep running their businesses as usual.

“Monthly payments are less than previous amounts, or have been completely suspended for a while, and do not affect Credit Bureau of Cambodia credit histories.

“In most cases, customers choose to pay only interest for three to six months, extend credit periods, or in extreme cases, suspend both interest and principal for three to six months,” Tongngy said.

The financial sector as a whole has introduced additional intervention measures over the year to alleviate the burden of the people most directly affected by the pandemic, such as those in quarantine, Covid-19 patients and families of deceased victims of the disease.

Prasac Microfinance Institution Plc senior vice-president Say Sony emphasised that Prasac has been following the NBC guidelines to take some of the burden off clients and accommodate those who are experiencing difficulties.

“Therefore, we will review customer requests based on feasibility and practical principles. We expect a reduction in the second half if the rate of Covid-19 infections decreases and the vaccination campaign completes, and we will be attentive to the implementation of the ‘three protections and three don’ts’ rules,” he said.

Financial institutions in Cambodia restructured some $4.2 billion in loans for 285,074 borrowers as of December 31 since the NBC on March 27, 2020 issued a circular on loan restructuring during Covid-19, to ease the burden on creditors in four priority sectors flagged as the most severely-hit by the pandemic – tourism, garments, construction, and transport and logistics, according to the central bank’s 2020 annual report.

MOST VIEWED

  • Hun Sen: Stop Russia sanctions

    Prime Minister Hun Sen said sanctions against Russia as a result of its military offensive in Ukraine should be stopped as they have produced no tangible results, and predicted that a global food crisis would ensue in 2023 as a consequence. Speaking to an audience at

  • Chinese tourists 2.0 – Coming anytime soon?

    Regional tourism is grappling with the absence of the prolific travellers and big spenders – the Chinese tourists. Cambodia, which has welcomed over two million Chinese tourists before Covid-19, is reeling from the economic loss despite being the first to fully open last November ‘To put

  • PM reflects on shoe throwing: Free speech or act of violence?

    Prime Minister Hun Sen on May 17 questioned whether a man who threw a shoe at him while he was in the US was exercising freedom of expression or if it was an act of hostility. Hun Sen was referring to an incident last week when

  • Siem Reap’s Angkor Botanical Garden opens

    The Angkor Botanical Garden was officially opened on May 19 with free entry for both local and international visitors for the first six weeks. The garden was established on a nearly 15ha plot of land in Siem Reap. “After the first six weeks, Angkor Botanical Garden

  • Pub Street on the cards for Battambang

    The Battambang Provincial Authority has announced that it is considering establishing a Pub Street in the area around the heritage buildings in Battambang town in a bid to attract more tourists. Battambang provincial governor Sok Lou told The Post that the establishment of a Pub

  • Hun Sen: Don’t react to hostility

    Prime Minister Hun Sen urged tolerance and thanked members of the Cambodian diaspora for not reacting to the hostility on display towards him by others while he was in the US to attend the May 12-13 ASEAN-US Special Summit in Washington, DC. In an audio