Logo of Phnom Penh Post newspaper Phnom Penh Post - Phillip Bank launches collateral-free credit

Phillip Bank launches collateral-free credit

Han Peng Kwang, CEO of PhillipBank.
Han Peng Kwang, CEO of PhillipBank. Moeun Nhean

Phillip Bank launches collateral-free credit

Singapore-based Phillip Bank announced yesterday that Cambodian borrowers that can prove a consistent monthly income will be able to access lines of credit without putting down collateral.

The bank, which recently formed a lending partnership with New Union (Cambodia), a branch of a Singaporean credit data analysis company, aims to tap into the growth of borrowing demands.

Han Peng Kwang, general manager of Phillip Bank, explained that while many people have the ability to pay back loans, borrowers are restricted from accessing lines of credit due to collateral requirements.

With a collateral-free credit product, he hopes that this will provide the opportunity to capitalise on consumer’s abilities to make regular repayments.

“No other bank in Cambodia is offering this product at this time, which is why we think it is the right time to introduce it,” he said.

“We understand that it is risky,” he said, adding that the two companies had adequately studied the market.

According to Kwang, Philip Bank has set aside $3 million in capital reserves for lending, and will provide cash-based loans with a monthly interest rate of 2 per cent. Loans start at $1,000 and are capped at three times a borrower’s monthly income.

Besides offering this product, the bank plans to increase its loan budget dependent on market forces as well as looking at lending products beyond those used to meet everyday needs.

Poh Wen Yi, managing director for New Union (Cambodia), said that the company will collect and analyse credit data supplied by customers to ensure that borrowers have the financial ability to make the monthly repayments.

“More data allows us to have a more accurate risk analysis,” he said. “A more accurate risk analysis means that it will be easier for lenders to grant loans of significant size.”

As of the end of May, Phillip Bank had broken even with approximately $90 million in both outstanding loans and bank deposits.

So Phonnary, executive vice president of Acleda Bank, countered that the model of lending loans without collateral for an amount below $3,000 was nothing to the Kingdom’s array of financial products. She said that the lending risk was limited if banks took adequate precautions and examined spending behaviours.

“Some borrowers that don’t have home or land titles have been taking out loans from us up to nearly 20 times already,” she said, adding that with continued lending “we can evaluate behaviour, income and actual repayment ability”.

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