The leasing sector is seeing explosive growth in Cambodia with the emergence of new services that allow consumers to purchase motorbikes, cars, and other household appliances.
According to the annual supervisory report released by the National Bank of Cambodia (NBC) last week, revenue from leasing last year accounted for $129 million. This is a huge jump from the $4 million recorded in 2013, when leasing was first introduced in the Kingdom.
Ngeth Chou, the senior consultant at Emerging Markets Consulting (EMC), said on Tuesday that even though the leasing sector is fairly new in the market, it has made significant progress and is giving vast opportunities to financial operators and consumers.
However, he urged caution as he said that financial literacy among Cambodians is still low, and that the public were leasing consumption assets rather than productive ones.
“Many young Cambodians use leasing services to purchase consumer goods that fit their modern lifestyles. If the largest share of leasing is for consumer goods, then it is not a good sign.
“Business owners are constrained by a lack of capital to buy more equipment, so if leasing services offer machinery and equipment for business and production, then it will be of greater benefit to the economy,” he said.
According to the NBC’s figure, there were 11 leasing companies at the end of last year. Assets they held totalled $174 million.