Cambodia's financial sector remains on a sustainable growth path despite the Covid-19 pandemic squeezing crucial industries, National Bank of Cambodia (NBC) governor Chea Chanto said.
Tourism, garments and footwear have borne the brunt of the Covid-19 impact, he said, whereas the financial and agriculture sectors have continued to grow.
“The NBC has laid out a slew of measures to improve arrangements for banks and financial institutions to command enough liquidity and encourage them to re-schedule loans to better provide for clients affected by the pandemic,” said Chanto.
In March, the NBC launched five measures – lowering the reserve requirement rate (RRR), delaying the conservation capital buffer (CCB) requirement to 2021, and reducing the interest rate on the liquidity-providing collateralised operation (LPCO).
It also lowered the interest rate on the negotiated certificate deposits (NCDs) and its liquidity coverage ratio (LCR) requirement.
The combined measures were estimated to make an additional $2 billion available to businesses.
The NBC also issued a directive for financial institutions to restructure loans for four priority sectors – garments, construction, logistics and transport (with emphasis on taxi and tuk-tuk drivers).
Shin Chang-moo, the president of South Korean-owned Phnom Penh Commercial Bank Plc, told The Post that his bank has seen positive business performance and continued stable growth in recent months.
Total assets have grown seven per cent from the end of last year, not counting for the $10 million raised for its corporate bond-listing on the Cambodia Securities Exchange, he said.
Total loan and deposit account balances surged just shy of seven per cent.
“We are experiencing an unprecedented market situation. Targets have been adjusted, but we will grow in terms of volume and profitability and are executing planned investments such as two new branches – [currently] in the construction and approval process.
“I have gone through two previous global financial crises. Among many changes, our priority is in liquidity control through tighter ALM [Asset Liability Management] and a credit screening model, in which we added more categories such as adjusted cashflows and recovery potentials.
“It was very timely that we pilot-launched unsecured SME loan products co-developed with the BanhJi [FinTech Co Ltd] accounting platform in mid-2019,” said Shin.
Say Sony, senior vice-president of Prasac Microfinance Institution Ltd, the Kingdom’s largest microfinance institution (MFI) in terms of total assets, also reported steady growth in business during the current trying times.
As of last month, its loan portfolios totalled $2.64 billion, gaining 5.83 per cent from the end of last year, Prasac data show. It boasted 618,000 deposit accounts totalling $1.89 billion – up 5.76 per cent.
“Our loan growth will not reach our projections due to the impact of Covid-19. As a result, we have a very high level of idle cash and liquidity. We do note that our business growth is slow but healthy,” Sony said.
He said the MFI kept close relations with clients and continuously discussed with them to find solutions that can help them cope with the crisis.
“At the same time, we are continuing to offer all types of loans to clients and, notably, we are participating in the government’s co-financing scheme to provide loans to small- and medium-sized enterprises with a lower monthly interest rate – just 0.58 per cent per month.
“We are ready to support our clients post-Covid-19 by ensuring they get the funds they need and customising our loan products and other financial services,” he said.
He said the bank has disbursed $2.1 million in loans to the education sector, mainly focusing on vocational skills training such as language training institutions and kindergartens.