Logo of Phnom Penh Post newspaper Phnom Penh Post - Banks urged to defer loans

Banks urged to defer loans

Content image - Phnom Penh Post
Workers around the country are struggling to pay back loans amidst Covid-19 layoffs.

Banks urged to defer loans

Fourteen trade unions submitted a petition to the Council of Ministers and the Prime Minister’s Cabinet on Wednesday, requesting all banks and microfinance institutions (MFIs) to temporarily suspend repayments, including interest, for workers suffering financially during the Covid-19 pandemic.

The petition states: “Due to the spread of Covid-19, labour has been suspended in garment factories, hotels, clubs, entertainment services, the transport industry, construction, agriculture and other sectors in Cambodia, causing workers to lose their daily income.”

Cambodian Labour Confederation (CLC) president Ath Thorn told The Post that the unions submitted the letter because out-of-work employees are unable to pay their debt during the spread of Covid-19.

“They will face increased loan repayments to banks and microfinance institutions from April onwards, and those working in factories and hotels have complained they cannot afford to pay the bank,” he said.

Acleda Bank Plc president and group managing director In Channy told The Post on Wednesday that all banks in Cambodia are following the directive of the National Bank of Cambodia (NBC) for settling debts, which includes not seizing workers’ assets during the pandemic.

The NBC also instructed banks and MFIs to implement “credit restructuring” measures to ease the burden on borrowers in the face of income losses.

Besides, the NBC recently issued a prakas on easing the reserve requirement ratios of banks to provide sufficient resources to support credit growth.

Channy said: “The above-mentioned measures are adequate. I don’t think there is a need to send any petition to Prime Minister Hun Sen because we are following the NBC’s directive.”

He said Acleda Bank has provided 295 loans to workers and their families worth more than $1 million, and that families which took agricultural loans should have no repayment problems.

“Their business is still operating as usual because it hasn’t been affected by the spread of Covid-19,” he said.

Vithey Microfinance Plc CEO Bun Mony told The Post that MFIs will also be taking part in the implementation of the NBC’s measures to deal with favourable debt repayments during the period.

However, he said, MFIs have a heavy burden of debt repayment to creditors because their capital investments are financed by loan repayments.

“Of course, the money we lend to the borrower, we borrow from others. So far, no one has applied for a deferred payment because their business hasn’t been affected yet. Most of our loans are in the agricultural sector,” he said.

In the garment industry, temporarily laid-off workers suffered another financial hit on Tuesday when Hun Sen said instead of earning 60 per cent of the minimum wage per month, they will now receive a flat amount of $70 monthly.

Watch video:


  • ‘Kingdom one of safest to visit in Covid-19 era’

    The Ministry of Tourism on January 12 proclaimed Cambodia as one of the safest countries to visit in light of the Kingdom having been ranked number one in the world by the Senegalese Economic Prospective Bureau for its success in handling the Covid-19 pandemic. In rankings

  • Kingdom accepts Chinese vaccine, PM first to get jab

    Prime Minister Hun Sen said China would offer Cambodia an immediate donation of one million doses of the Covid-19 vaccine produced by the Sinopharm company. In an audio message addressing the public on the night of January 15, he said Cambodia has accepted the offer and

  • Reeling in Cambodia’s real estate sector

    A new norm sets the scene but risks continue to play out in the background A cold wind sweeps through the streets of Boeung Trabek on an early January morning as buyers and traders engage in commerce under bright blue skies. From a distance, the

  • Hun Sen: Lakes filled in for national developments

    Prime Minister Hun Sen has announced continued operations to fill some lakes in Phnom Penh to create land for developments, though he is against the unrelated practice of damming rivers or blocking waterways. Speaking at the inauguration of the Ministry of Public Works and Transport

  • Koh Preus upgrades 70% complete

    Initial construction of a nearly $30 million tourism infrastructure project on Preah Sihanouk province’s Koh Preus Island is “about 70 per cent complete”, according to an official with the developer. Heng Thou, construction site manager of Angela Real Estate Co Ltd (ARE), told The Post that

  • Local media loses a giant, and The Post a great friend

    Cheang Sokha, a gifted and streetwise reporter who rose to the highest ranks of Cambodian media and was beloved for his sharp intelligence, world-class humour and endless generosity, died on Friday in his hometown of Phnom Penh. He was 42. His wife, Sok Sophorn, said he