CMA members restructure $1.4B in loans
FINANCIAL institutions that are members of the Cambodia Microfinance Association (CMA) restructured some $1.397 billion in loans for 289,422 borrowers as of February 28 since the National Bank of Cambodia (NBC) on March 27 issued a circular on loan restructuring during Covid19, according to CMA.
The number of applicants for credit restructuring during the period reached 307,875, translating to a 94 per cent approval rate, CMA data show.
The association has pointed out that the number of applicants has remained on a significant, encouraging downtrend and augurs particularly well for the finance sector.
NBC’s loan-restructuring directive was issued to all banks and financial institutions to restructure credit for loans in four priority sectors – tourism, garments, construction, and transport and logistics, which NBC flagged as the most severely affected by the pandemic.
The circular aimed to maintain financial stability, support economic activity and ease the burden of debtors facing declining revenues during the ongoing Covid-19 outbreak. The directive will be implemented until mid-2021.
Kaing Tongngy, head of CMA’s communications department, told The Post on March 3 that the dwindling number of applicants for loan restructuring signals a decline in Covid-19’s stranglehold on the financial sector.
“With the recent community outbreak, CMA expects an increase in loan restructure requests for the coming months because most clients pay on a monthly basis.
“While we are waiting to see the real impact, we do not expect any major shocks as those in early mid-2020 because the bulk of trade and business remains despite a slower pace.
“People seem to be used to such outbreaks and merely go about their daily lives while being cautious,” he said.
Prasac Microfinance Institution Ltd executive vice-president Say Sony noted a declining trend in loan restructuring even amid the February 20 community transmission.
He said: “The trend is quite in tune with the businesses situation – there were a number of exceptional events in 2020 such as Covid, the floods, as well as two big community outbreaks.
“But, this year we started out with the February 20 community outbreak and we still don’t know the [full extent of the] impact yet, but we’ll keep close tabs on this one.
“At any rate, there were more requests from our clients for a first restructuring, not many for a second one. But after this third outbreak this could see a slight increase.”
According to Tongngy, small and medium-sized enterprises (SME) account for the greater part of restructured loans.
“Clients who are affected by Covid-19 can still request for a loan restructuring till June 2021. With the recent community outbreak, we expect the number of requests to increase but not as much as in early 2020.”
THE Southeast Asian tea brand Tealive is set for a debut on the Cambodian market with 25 outlets planned over the next five years, Malaysian government news agency Bernama said on March 3.
Malaysia’s Loob Holding Sdn Bhd (LHSB) has penned a master franchise agreement with the Kingdom’s HSC Group.
The company said the Kingdom would be its eighth market after Malaysia, Vietnam, Myanmar, Brunei, the Philippines, Australia and the UK, according to Bernama.
LHSB founder and CEO Bryan Loo said HSC Group was an ideal partner for the Tealive brand, remarking on the group’s portfolio of international brands in the food and beverage industry.
“On our part, we’re bringing in the latest Tealive 3.0 format that meets new normal requirements and more, like contactless ordering and payment, drive-through and drive-in models, coupled up with the full range of Tealive Eats snacks,” he was quoted as saying.
At more than 3,000 square feet (280sqm) and boasting dine-in facilities and a live entertainment section, LHSB said the first Cambodian outlet would be set up in the capital.
HSC Group owner Sok Hong said more Cambodians are now willing to take the leap into modern tea culture.
While many international brands have made their way into the Kingdom over the years, the market remains nascent, he said.
“We’re both proud and excited to introduce Tealive to Cambodians as the brand’s positioning of affordable luxury and innovative products are exactly what young Cambodians want.
“With HSC’s local experience, we make a great team to bring this leading lifestyle tea brand for Cambodians to enjoy,” Hong said, as reported by Bernama.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng previously said investors’ interest in bringing well-known foreign brands to Cambodia reflects their confidence in the Kingdom in terms of political stability and economic viability.
This, he said, is because investors study a country’s investment potential, domestic purchasing power and the macroeconomic situation at length before introducing wellknown brands.
He said the CCC regularly advertises at international events to entice more famous brands to open shop in Cambodia.
“Having more franchise companies is an indication of how well-off a country is, in both political and economic terms,” Heng said, adding that the presence of franchises in turn draws in larger clusters of investors.
HSC Group currently manages international food and beverage brands such as Burger King, Paris Baguette, Crystal Jade Restaurant, 100 Plus and others in the Kingdom, in addition to cosmetics and retail brands.
THE chairman of the Ho Chi Minh City (HCMC) People Committee has pledged to review all housing projects in the city and work out solutions to create a “more transparent, fair and competitive business environment”.
Speaking at an annual meeting with the HCMC Real Estate Association (HoREA) on February 27, Nguyen Thanh Phong said the city would work with agencies to address delays in “the issuance of investment policy approval for developers and ownership certificates for homebuyers”.
HoREA chairman Le Hoang Chau said that over the past years, the association has submitted numerous petitions and proposals to the government and local authorities to resolve problems related to investment and construction.
Businesses have frequently petitioned the People’s Committee to speed up procedures for investment approval for commercial housing projects, he added.
Last year alone, 61 commercial housing projects were delayed because the land they were allotted was a mix of plots with various purposes and uses, he said.
“A number of projects being built on public lands were halted and are being reviewed for compliance,” Chau added.
According to a report from the Department of Construction, procedures for investment approval of commercial housing projects take up to 247 working days, or 50 weeks, excluding 14 public holidays, which is too long.
The association has also urged city authorities to speed up the issuance of home ownership certificates for
more than 30,402 housing units in 163 projects in the city.
He said: “The Department of Natural Resources and Environment needs to work with the Department of Finance, the City Land Price Appraisal Council and other agencies to determine landuse fees for the housing projects to speed up the process.
“Priority should be given to homeownership certificates for homebuyers who have fulfilled their obligations under the housing purchase contract.”
A number of apartment buildings have been built in violation of approved plans and designs in the city, delaying the issuance of land-use and home ownership certificates, according to the Department of Construction.
Many developers have even mortgaged their buildings to get loans for other projects, meaning buyers have been unable to get ownership certificates, it said.
Recently, city authorities issued guidelines to speed up the issuance of land-use and home ownership certificates to buyers to prevent disputes with housing developers.
They divided apartment projects into two categories related to collection of land-use fees and issuance of ownership certificates.
For apartments within a compound, the entire project area is identified as “residential land” and is subject to fees for issuance of certificates for land-use rights, house ownership and other land-related assets.
For those without compounds that come with public areas such as parks, schools, hospitals, and main roads connecting to public roads outside the apartment building, only the area of land used for apartment construction is considered “residential land”.
For public areas, the city will organise bids to select investors.
The construction of technical works such as electricity and water supply, drainage, lighting and telecommunications systems must be done by the developer and handed over to the city. No land-use fees will be collected.
The Department of Natural Resources and Environment has been assigned to work with the departments of planning and architecture, construction, and other agencies to classify land areas in each project (both already completed and upcoming) subject to fees for issuance of ownership certificates.
The Department of Construction will be responsible for monitoring compliance with construction norms and penalising violators.
The city has ordered agencies to carefully review investors’ financial capacity before licensing projects. Investors found to have committed violations must be severely sanctioned.
There are 15,000 real estate firms operating in the city.
Experts attributed the challenges facing businesses to inconsistent regulations on housing and land investment. Hundreds of housing projects are under inspection for legal procedures, delaying their progress.
A TOP aide of Kremlin critic Alexei Navalny called for sanctions on top Russian oligarchs in an interview with AFP, as the US followed the EU in imposing sanctions on some officials.
Leonid Volkov also said Navalny’s anti-corruption movement was hoping to unseat “at least 60 to 70” deputies from President Vladimir Putin’s United Russia party in elections this year.
The aide, who runs Navalny’s political campaign across Russia, said EU sanctions against four Russian officials involved in Navalny’s detention were a “good step forward”, but “not enough”.
Washington on March 2 also adopted sanctions on seven government officials, signalling a harder line from US President Joe Biden.
But, speaking in his office in the Lithuanian capital Vilnius, Volkov said: “What would really create leverage against Putin would be sanctioning the close circle of his oligarchs.”
Volkov said he was “very disappointed” by remarks from EU foreign policy chief Josep Borrell about sanctions being targeted at people “directly connected” to Navalny’s arrest, arguing that oligarchs close to Putin were also linked.
“There is such a clear connection and we will do our best to convince European politicians that such a connection exists.
“But still, even if only those four people are on the list, it’s a very important first step,” said Volkov, who is currently wanted in Russia and its former Soviet allies on charges of encouraging minors to attend pro-Navalny demonstrations.
Volkov said key figures close to Putin who were not on the EU sanctions list “will definitely feel very vulnerable”.
Kremlin spokesman Dmitry Peskov on March 2 brushed off the sanctions, saying that “such a policy does not achieve its goals”.
Navalny was jailed in January after returning to Moscow from Germany, where he had spent months recovering from a poisoning with a banned nerve agent he blames on Putin.
The Kremlin denies it was behind the attack.
The imprisonment of Putin’s best-known opponent sparked nationwide protests that saw thousands of demonstrators detained and triggered calls in the West for Navalny’s release.
The 44-year-old campaigner was reportedly transferred to a penal colony some 100km east of Moscow last week to serve out his sentence of two and a half years.
Volkov said Navalny’s campaign would try to field its own candidates in elections in September but, failing that, would call for “smart voting” in favour of other candidates to try to oust lawmakers from the ruling United Russia party.
“We expect that we will be able to unseat at least 60 to 70 incumbent United Russia members of the Duma . . . which will be a major blow for them,” he said, adding that the aim was to “cause as much political damage to United Russia as possible”.
Volkov said the elections were “crucial” because the next parliament will be in power during the 2024 presidential election when Putin will have to consider whether to run again and extend his more than two decades in power.
Despite a wave of arrests against organisers of Navalny’s anti-corruption campaign, Volkov said they would be able to increase the number of regional offices to 45 from 37 currently.
Asked about Amnesty International’s decision last month to strip Navalny of “prisoner of conscience” status because of his past ultra-nationalist views, Volkov said the respected human rights group had been “manipulated by Kremlin propaganda”.
“It has been weaponised by Putin,” he said.