Cambodia: Banking, microfinance sectors maintain strong growth

• Aug 01, 2019

Loan and deposit growth in the Kingdom’s crowded financial sector remained high during the first half of the year, a result of sound macroeconomic management and political stability, the Central Bank said in its latest report.

The National Bank of Cambodia’s report, released last week, said that loans in the banking and microfinance sectors rose by about 22,4 percent in H1, growing by $27.7 billion. The value of all outstanding loans has now reached $21.5 billion in the banking sector and $6.2 billion in the microfinance industry.

Cambodia’s banking and microfinance sectors continue to play a crucial and active role pushing economic growth and reducing poverty and inequity, Chea Chanto, the Central Bank’s governor, said last weekend during NBC’s biannual meeting.

He said the offer of financial services continues to expand in the country, creating more opportunities for people in urban and rural areas and improving their livelihoods.

“Given this growth, regulation of the sector needs to be strengthened alongside financial literacy,” Mr Chanto said. “All macro and microeconomic factors must be in place to mitigate risks to financial stability.

“The banking sector contributed and supported the strengthening of the financial safety net as well as regional cooperation. An example of this is the Asean framework and Asean+ 3 (China, South Korea, and Japan), which aims to boost the development of the financial sector, and enhance financial inclusion and financial stability in the region,” he said.

In Channy, president of Acleda Bank, the largest locally-owned bank in the Kingdom, told Khmer Times that Acleda has been focusing on helping small and medium-sized enterprises grow and reported strong financial results during the first half of the year.

From January to June, deposits at Acleda reached more than $4 billion while loans exceeded $3.5 billion. The bank’s profit after tax was about $60 million.

This growth was the result of the bank’s new emphasis on digital and its determination to develop its financial technology, or fin-tech, capabilities to improve services, Mr Channy noted.

“The bank has certainly benefitted from the stable macroeconomic situation, which has enabled growth in the financial sector,” he said. “Last year, Cambodia’s economy expanded by 7.1 percent and this year the government has projected a 7 percent growth rate, so the financial sector and the economy will continue to expand at a very fast pace.

“Acleda Bank has been growing as a result of its lending activity to support SMEs in Cambodia. We don’t care about big loans; we want to help our SME customers grow. Right now, we are lending about $6 billion to SMEs and we will continue down this path,” Mr Channy said.

Say Sony, senior vice president of Prasac Microfinance Institution, said that their loan portfolio grew by 21.2 percent in H1 compared to the same period last year.

“The MFI sector as a whole performed very well during the first half of the year.

“Prasac remains a leading player in terms of portfolio growth and quality thanks to the stable economic growth, access to finance, and regulation from the National Bank of Cambodia and local authorities,” he said.

Cambodia has 44 commercial banks, 15 specialised banks, 7 microfinance deposit taking institutions, 74 microfinance institutions, and 254 rural credit operators, the report points out.

Total assets in the banking and microfinance sectors increased by 19.2 percent in H1 to reach $44.8 billion. There are now 2,367 bank and MFI offices in the Kingdom and 2,228 ATMs.

Source: https://www.khmertimeskh.com/50629111/banking-microfinance-sectors-maintain-strong-growth/