Phillip Bank Plc, which merged with KREDIT MFI in January, is putting in place a safety net for all its loanees facing a cash-crunch due to the Covid-19 outbreak.
The lender has reached out to around 2,700 of its borrowers to assist them in rescheduling their loan repayments at a time when businesses are facing financial hardships due to the health scare since March.
Phillip Bank has focused on three key segments: retail – cars, housing and personal loans – micro loan borrowers, and corporate – small and medium-sized enterprises.
Commercial banks are taking proactive measures to ensure that their loan growth is not affected and at the same time to stop bad loans – especially from the corporate sector and retail borrowers – from rising due to the slowing economy triggered by the unprecedented Covid-19 outbreak.
Joining a long list of other commercial banks in the Kingdom, Phillip Bank has introduced an assortment of remedial measures, from loan rescheduling and restructuring exercises, to minimise the impact on businesses and borrowers, and to help businesses stay afloat during this critical time.
“As a bank we need to serve and help our customers. We have restructured microloans for some 2,600 borrowers.
“Customers have a grace period of six months, mostly to pay only their interest and later pay their principal sum.
“For some customers, they don’t have to pay either interest or principal for six months.
“We follow the guidelines of the National Bank of Cambodia and want to help our customers,” Phillip Bank CEO Chan Mach told The Post.
Up to March, the bank has been involved in restructuring loans amounting to $33.5 million. The bank’s interest rate charge to micro borrowers and corporate customers are competitive in the market, he said.
He said the main sectors to become casualties of the coronavirus outbreak were tourism, private education institutions, hotels and restaurants.
“In some cases, business operators complain they have lost 70 per cent of their monthly income. We will have to watch the next six months. Some businesses are slowly recovering,” Mach said.
Following the merger with KREDIT MFI, Phillip Bank now boasts 89 branches nationwide, with a strong workforce of 1,900 staff. It is busy streamlining its operations and providing training for its employees, and has even introduced new mobile applications as part of its digitalisation efforts.
“Along with the merger, we are building something new. Internet banking and a virtual card will be introduced, and also the loan origination, which will help us serve our customers more quickly, and also reduce our costs. We will place increased focus on new technologies and go paperless. We are set to convert 12 branches into fully fledged commercial bank operations,” Mach said.