In the first half 2018, the local financial sector continued the strong growth that has characterised the industry in recent times, with commercial banks and microfinance institutions (MFIs) seeing a robust expansion in loans and deposits, according to the National Bank of Cambodia’s (NBC) semi-annual report released on Saturday.
In commercial banks and microfinance deposit-taking institutions (MDIs), deposits rose by 22 percent, reaching more than $21 billion, while loan portfolios increased by 18.8 percent, amounting to nearly $22.5 billion.
There are now 5.6 million deposit accounts in Cambodian commercial banks and MDIs and 2.6 million loan accounts in commercial banks and MFIs, it says.
According to the report, loan portfolios in the MFI sector reached $4.85 billion during the first half of 2018, an increase of 34.2 percent. Up to 1.8 million Cambodians took out loans with an MFI at some point during the first semester of the year.
Most loans were taken out by small entrepreneurs in the agriculture sector (23.8 percent), trade (18.2 percent), service (10.3 percent), logistics (4.7 percent) and construction (4.3 percent).
“Microfinance institutions have diversified their financial services with money transfer, mobile banking, ATM and micro-insurance services,” the report says.
In the banking sector, meanwhile, most loans went to retail (17.4 percent), wholesale (11.7 percent), construction (9.9 percent), and agriculture, forestry and fisheries (9.8 percent).
“The progress of financial technology and the increase of demand from Cambodian people has pushed the bank and microfinance sectors to develop and upgrade themselves by building more branches, diversifying services, boosting efficiency and quality of products and operation, increasing liquidity and strengthening good governance,” the report reads.
“The MFI and banking sectors continue to show strong and healthy growth which reflects the fact that there is enough capital and liquidity.
Finally, the report notes that loan management continues to be effective as the level of non-performing loans is relatively low: 3.1 percent for banks, and 5 percent for MFIs.
Say Sony, vice-president of Prasac Microfinance Institution, told Khmer Times that he is optimistic about the future of the sector despite the upcoming general election, the interest rate cap that the central bank established in March last year and uncertainty at the international level.
