The National Bank of Cambodia (NBC) called for authorities yesterday to stop some small rural credit institutions from taking deposits from people by promising higher interest rates.
The central bank said some rural credit institutions which had just transformed themselves from non-governmental organisations were lobbying people to make deposits.
“The National Bank of Cambodia would like to say that from this month, besides the commercial banks, there are only seven micro-finance institutions with deposit-taking licences which are allowed to take deposits from the public,” it said.
NBC director-general Chea Serey said yesterday that the announcement on microfinance deposit-taking institutions aimed to provide clarification to the public.
“The reasons we needed this announcement were firstly, some rural credit operators initially registered as NGOs have collected deposit from their members and public,” she said.
“They were asked to stop these activities when they registered with the NBC.
“Second, the NBC has noticed that some NGOs and community-based organisations have used the name of rural creditor operators or microfinance institutions, without registering with the NBC, to provide credits and collect deposits.”
Hout Ieng Tong, general director of Hattha Kaksekar, one of the leading-micro finance institutions that got a licence for deposit-taking, said that action taken by the regulator (NBC) clearly stated that only seven micro-finance institutions could take deposits from the public.
“I used to hear about the problem of the others but I did not investigate,” he said.
“So, now, our regulator has issued the announcement which is a good message from our regulator to let the public clearly know and watch out for those small rural credit organisations which persuade people to put deposits with them to get high interest rates.”
He said the rural credit institutions were small. Depositors’ money would not be safe if they got into financial trouble.
“That’s so risky,” he said.
