“At least once a year people go for their health check-up to make sure their health condition is good. But many people don’t do their financial health check,” laments Credit Bureau Cambodia (CBC) CEO, Oeur Sothearoath.

Cambodia’s financial sector is fast developing, against a backdrop of steady economic growth and growing investor confidence. More than three dozen banks, dozens of microfinance agencies and major foreign insurance companies have set up their operations in the Kingdom. 

With a growing middle class and a changing lifestyle due to increased household income, demand for a boutique of financial products and services such as credit cards and loans have increased. Therefore, credit worthiness is crucial for taking a bank loan or applying for a credit card.

“Financial health check is one of CBC’s services which allow all consumers to check their credit worthiness before they apply for loans. This report will help expedite their application process. If a person has a good record, he or she can even negotiate for a lower interest rate from the bank."

“It is also a tool which helps microfinance and banks to understand their client’s financial status well and this helps to reduce lending risks,” Oeur told The Post on Wednesday.

The CBC creates  a personal credit report from data  collected from banks, microfinance companies and leasing companies nationwide.

Lenders have online access to the data and this helps them to evaluate an applicant’s credit worthiness before making a decision on whether to approve the person’s loan  application.

CBC which started operations in 2012 has managed to establish a database of about five million customers or 50 per cent of the adult population in the Kingdom, compared to 60 per cent in Thailand and Vietnam’s credit registry coverage of 54.8 per cent.

However, a large part of the Cambodian population are unaware of the importance of a personal credit report and failed to create a personal credit history for themselves.

The two to three-page report issued by CBC contains information such as a person’s payment history, how many loans the person has taken from financial institutions in the past and employment data, among others.

Any Cambodian can obtain a personal credit report from CBC’s head office in Vattanac Capital, Phnom Penh, for free within 10 working days and if they want it immediately, a fee of 20,000 riels is charged for each report.

“It is really important for customers to build a good credit record, meaning when getting a loan, the borrower has an obligation to make repayments on time, otherwise they may be fined. As a result, this will be recorded as a late payment in the credit report,”  added Oeur.  

To promote the personal credit report, CBC is going to the ground to create awareness, by organising talks for university students, faculty staff and working professionals.

In addition, as part of its strategy, the bureau will launch an App next year and an online channel where consumers can easily obtain their credit report.

“In the next three to five years, we expect customers in rural areas to obtain the credit report from our partners.

The National Bank of Cambodia, the Association of Banks in Cambodia, the Cambodia Microfinance Association and the International Finance Corporation, initiated a private credit bureau to ensure Cambodia’s financial sector is fair, transparent and well-managed and has a credit market to support the nation’s economic growth.

“The objective of the CBC was to have another layer to protect the financial sector as a whole. It also helps banks to become more responsible when approving loans, managing risks and harmonisingthe financial sector.

“Six years down the road, we see there is a change in behaviour pattern among banks and microfinance [companies].

“They appreciate our credit report, they can check the report instantly and these are updated and uploaded every month on our platform,” he added.      

Besides helping the financial sector, the CBC’s personal credit report has also raised Cambodia’s image at an international level as a better place do to business, said Oeur.

In addition, CBC also promotes greater financial stability by providing accurate real-time data to consumers and industry to enable them control the financial aspects of their business.