Recent reports from the Credit Bureau Cambodia (CBC) present a mixed picture of Cambodia's credit market, with retail credit showing positive growth while small business lending experiences a decline. 

The findings, released for the second quarter of 2024 – from April to June – highlight varying trends across different sectors and regions – plateau, coastal, plains and the Tonle Sap.

The Retail Credit Index report for Q2 2024 shows an increase in both the number of loan accounts and outstanding loan balances. 

The total number of retail loan accounts rose by 4.75%, reaching approximately 1.92 million accounts by the end of June 2024. The outstanding balance of retail loans increased by 0.67%, totalling $15.31 billion.

Growth was largely driven by mortgage and credit card applications, which saw increases of 17% and 15%, respectively, from the previous quarter. Personal finance applications, however, declined by 2%.

“The demand for retail credit decreased in terms of the number and amount of applications; however, retail credit performance was positive in both the number of loan accounts and loan balance in this quarter,” said Oeur Sothearoath, CEO of the CBC.

Despite this growth, the quality of retail loans showed signs of deterioration. The ratio of loans that are 30 days or more past due (30+ DPD) increased from 6.03% in the first quarter to 6.22% in the second quarter, indicating a slight rise in overdue payments.

In contrast, the Small Business Credit Index report reveals a contraction in the small business lending market. 

The number of small business loan accounts fell by 1.7%, with the total number of accounts standing at around 1.86 million. The overall loan balance saw only a marginal increase of 0.1%, reaching $34.22 billion.​

Small business credit applications decreased by 7%, with significant drops in working capital, asset finance and construction loan applications. 

Working capital applications fell by 11%, asset finance by 9%, and construction by 14.2%. The only category that saw growth was agriculture credit, with a 2.7% increase.

"The demand for small business credit decreased in terms of both the number and amount of applications, and small business credit performance was negative in the number of loan accounts – 1.7% – while loan balances increased +0.1% in this quarter," added Sothearoath.

Loan quality in the small business sector also showed signs of strain. The 30+ DPD ratio for small business loans increased from 7.8% in the first quarter to 8.3% in the second quarter. 

The construction sector, in particular, had the highest 30+ DPD ratio at 15.3%, reflecting increased credit risk in that area.

The reports highlighted significant regional differences in credit performance. For retail credit, the plateau region saw the highest increase in credit card applications at 46%, while the coastal region led in mortgage applications with a jump of 29%.

On the small business side, the plateau region experienced the most substantial decrease in construction loan applications, which dropped by 65.5%.

Despite the challenges in small business lending, some regions showed positive growth in retail loan balances, such as the Tonle Sap area, which recorded a 2.5% increase.