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Firms back loan relief measures for victims

Firms back loan relief measures for victims

Representatives from the Kingdom’s microfinance sector on Sunday said the industry was keeping a close watch on those impacted by the Mekong River flooding, and that they were willing to take measures to reduce the financial burden on the victims.

This came after the National Bank of Cambodia (NBC) and the Ministry of Economy and Finance (MEF) issued a joint statement on Friday, suggesting that institutions find ways to ease the debts of those who had been displaced.

Cambodia Microfinance Association (CMA) executive director Yun Sovanna said members have been examining the issue and regularly shared reports with the association.

He said up to now, there has not been a serious issue over the repayment ability of customers in flood-affected areas. Many zones, he said, had prepared in advance for flooding and were able to minimise any negative impact caused by it.

“If there is a serious issue affecting the livelihood and revenue [of the debtor], we will discuss with them on a case-by-case basis to find a solution,” he said.

The initial joint statement from the NBC and MEF suggested that interest rates for affected customers be reduced, or waived entirely.

Emerging Market Consultant senior consultant Ngeth Chou said on Sunday that the recent floods could affect some debtors. However, he predicted it wouldn’t be a big issue as most had more than one source of income for repayment.

“If the number of impacted people grows, and flooding becomes more serious, it will affect the ability of microfinance institutions to gain profit.

“Normally, when solving bad loans, every formal institution allows a grace period and has mechanisms to solve the problem step by step,” he said.

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