Private sector loans hit $53.1B: NBC
THE Kingdom’s financial institutions have on the whole posted very solid business performance in the second quarter of the year, ended June 30, thanks to the strong recovery seen since the government adopted a “living with Covid” stance in November 2021, allowing socio-economic activity to resume in earnest.
The National Bank of Cambodia (NBC) on December 11 reported that outstanding loans extended by financial institutions to the private sector in all economic domains grew by 23.6 per cent on a yearly basis to 216 trillion riel as of June 30, which the central bank converted to $53.1 billion.
Broken down by domain, construction accounted for the lion’s share at 58.4 trillion riel, up 30 per cent yearon-year, followed by the wholesale and retail trade (53.5 trillion riel; up 25.6%), services (21.3 trillion riel; up 14.5%), agriculture (20.3 trillion riel; 24.6%), household (11.7 trillion riel; up 12.1%) and manufacturing (7.2 trillion riel; up 24.3%), with the remainder receiving 43.6 billion riel, up 20.7 per cent.
The NBC explained that the figure for construction also encompasses “real estate and mortgages, owneroccupied housing”.
“Credit is a main source of funds to support economic activities and distributed to key sectors, such as construction, wholesale and retail
trade, services, agriculture, household, and manufacturing,” the central bank said.
ACLEDA Bank Plc senior executive vice-president Mar Amara told The Post on December 13 that her bank’s loan portfolio reached $5.85 billion as of June 30, up by $1.23 billion or 26.51 per cent year-on-year.
She said that since the government moved to allow the full resumption of socio-economic activity in November 2021, “the overall performance of the economic recovery is on track and continues to gain traction”.
Amara attributed this to “robust trade performance; exceptionally resilient
export growth in manufacturing – both garment and non-garment – as well as agriculture; recovery in domestic consumption and FDI [foreign direct investment] inflows; and the revival of the service sector”.
Cambodia Post Bank Plc (CPBank) CEO Toch Chaochek told The Post on the same day that the financial industry recorded overall remarkable performance in the first quarter, but somewhat of a slowdown in the second.
“The industry as a whole has been doing well, as there’s more demand [for loans] from businesses and investors, it’s just that repayments have been a bit late – but it’s not a risk to the industry,” he said.
On the other hand, other sectors have been managing well despite global economic uncertainty, he said.
Speaking to The Post later that day, Cambodia Microfinance Association (CMA) spokesman Kaing Tongngy commented that emerging economies require credit to fuel growth.
He said the national economic recovery plan’s focus on small- and medium-sized enterprises has prompted banks and microfinance institutions to tailor their products to support these smaller businesses.
“Unlike many countries in the world, [the] private sector in Cambodia relies main[ly on] the financial sector for funding. The growth of 23.6 per cent [reported by the NBC] is a positive sign of [the] active participation of [the] bank[ing] and microfinance sector, to support the private sector in Cambodia.
“CMA sees [improvements in] economic performance despite some external challenges. Although [the] microfinance sector saw an increase of portfolio at risk, PAR30+, from two per cent to three per cent due to restriction[s] on loan restructur[ing] to ensure sector stability, we notice most of our clients have resumed their economic activities fully.
“If no external challenges may arise, CMA is confident [in] the current economy, and we expect the sector to grow at [a] 20 per cent rate,” Tongngy said.