Consumer Credit Index Quarter 2, 2018: The total Consumer Credit accounts and outstanding continued to increase and the NPL 30 continued to drop

• Consumer Credit application decreased by -15%
  • Personal Finance application decreased by -14%
  • Credit Card application slightly increased by +1.9%
  • Mortgage application decreased by – 21%
• Number of loan increased by +5.62%
• Outstanding balance increased by +5.08%
• Total Consumer Credit account (Personal Finance, Credit Card, Mortgage) as of June 2018: 955K (34.19% of total industry loan account), total Consumer Credit outstanding balance USD 5.16 billion (28.81% of total industry loan)

Phnom Penh, Aug 03, 2018

According to the CBC’s latest Consumer Credit Index Report, credit application saw the first drop in 2018 both in number and amount of application in Q2, 2018. This seasonal trend was the same as in Q2, 2017. However, the total account and outstanding balance still continued to grow in the moderate level followed same period last year, which was slower than Q1. Good performance with non-performing loan 30 days (NPL 30) continued to decrease to 1.30% from 1.42% in Q1, 2018.

Consumer Credit Application: represents the intention of consumers to acquire credit in term of Personal Finance, Credit Card, and Mortgage

In Q2, 2018 Consumer Credit application was seasonally back to the decline of -15% and -14% in the application amount (Q1, 2018: +19% in number, +21% in amount). Compared to the same period last year, the drop rate was the same in term of application number -15%, while the application amount was -14% in Q2, 2018 vs -3% in Q2, 2017. The drop was mainly driven by Mortgage (-21%) and Personal Finance (-14%), while Credit Card application number slightly increased by +1.88% after the decline of -31% in last quarter. Interestingly Mortgage and Personal Finance noticed decline in all the regions, of which Coastal had the highest drop rate consistently for both products _ Mortgage: Q2, 2018 -26% vs Q1, 2018 +15%, and Personal Finance: Q2, 2018 -18% vs Q1 2018 +35%.  Plain was the second highest drop in loan application where -21% in Mortgage (vs +12% in Q1, 2018) _ mainly the drop in Svay Rieng, Kampong Speu, Prey Veng, and Takeo respectively. Personal Finance went down by -16% vs Q1, 2018 +23% _ major drop in Svay Rieng, Kampong Speu, and Kandal respectively.

Consumer Credit Performance: indicates the situation of actual Consumer Credit as of the reporting quarter

As of Q2, 2018 total number of account grew by +5.62%, slower than the last quarter which was +7.22%. At the end of this quarter, total industry loan account reached 2.79 million of which total Consumer Credit account was 955K (vs 904K Q1, 2018) represented 34.19% of total industry loan account. Although Tonle Sap saw the highest growth of +6.4%, it grew across the 4 regions in term of account for Q2. Personal Finance still accounted for the largest share in Consumer Credit account of 80.77% followed by Mortgage 11.55%, and Credit Card 7.68%, these proportions remained very similar to last quarter just slightly shrank in Personal Finance and Credit Card’s share. Mortgage’s share looked bigger due to the growth of +6.76% in number of account. At the same time, Personal Finance and Credit Card grew slower at +5.48% and +5.30% respectivel

Reflecting number of account’s performance, the outstanding balance saw an increase of +5.08% compared to +8.10% in Q1, 2018. This growth made the outstanding balance reached to USD 5.16 billion at the end of the quarter represented 28.81% of total loan in the market. Personal Finance and Mortgage almost shared the same proportion of the total Consumer Credit outstanding which was 50.82% and 48.38% respectively, while Credit Card accounted for the smallest share of 0.80%. Mortgage’s share slightly increased compared to last quarter due to the +5.43% growth in outstanding balance within the quarter. A little shrinking in Personal Finance’s share, whilst Credit Card remained stable occupied of 0.80% of total loan book. Phnom Penh represented almost 50% of total Consumer Credit outstanding balance that made Plain region shared up to 76% of total book. Kandal shared only 7% as the 2^nd largest province followed by Siem Reap & Kampong Speu similarly shared of 6%.

Consumer Credit Quality: reflects the ability of debtors to meet their scheduled payments

Non-performing loans 30 days (NPL 30) have improved across all the regions, except Plateau region compared to last quarter. The NPL 30 continued to drop significantly over the last 4 quarters from 1.70% in Q2, 2017 to 1.30% this quarter (Q1, 2018: 1.42%). In depth on the drop of NPL 30 in this quarter, with the +5.08% growth in total outstanding balance at the same time NPL amount dropped by -4%.

Across the 4 regions, Plateau was the only region with decline in outstanding whilst NPL 30 amount increased, as the result NPL 30 was 1.74% vs 1.54% in Q1. In particular, Phnom Penh noted the good improvement on its NPL 30 (Q2: 1.35% vs Q1: 1.57%), though remaining the highest in NPL amount reflecting its outstanding balance. Interestingly, Battambang NPL 30 considered the highest of 3.17%, whilst its outstanding balance shared only 3% of total Consumer Loan book.

No change to last quarter, Credit Card NPL 30 remained the highest among all the three products of Consumer Credit, Q2: 2.43% vs Q1: 2.13%. NPL 30 of Personal Finance a little improved, Q2: 1.86% vs Q1: 1.98%. Mortgage NPL 30 remained the smallest of 0.88% as of Q2, which higher than Q1 of 0.81%.

Multiple Loan Relationship: referring to customers who hold many loan accounts or/and split their loans with more than one financial institutions at the point of reporting time (Consumer Credit only)

No difference from previous quarters where the majority still remained with customers holding one loan account, which was 68.98% as of June 2018; though, slightly dropped compared to last quarter while noticed bigger portions of customers holding two accounts and three accounts which were 23.08% and 6.20% respectively. Total customers who hold at only one institution remained significant in this market of 79.91% of the total Consumer Credit customers, which is similar to last quarter (80.30%).

“In spite of the seasonal drop of the Consumer Credit application, the total accounts and outstanding still continued growing steadily, which accounted for 34.19% of the total accounts and 28.81% of the total outstanding balance of the market. This quarter, we also observed the good performance with NPL 30 continued to drop to 1.30% from its peak of 1.70% in Q2, 2017. This indicates the good health of the Consumer Credit book.”  said Mr. Sothearoath Oeur, Chief Executive Officer of Credit Bureau Cambodia.

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Note to editors

1)  The full report is attached to this message

2)  For the purpose of this report, Cambodia is classified in 4 regions: Tonle Sap, Coastal, Plain and Plateau

3)  About Credit Bureau Cambodia (CBC)

Credit Bureau Cambodia is the leading provider of credit information, analytical solutions, and credit reporting services to banks, microfinance institutions, leasing companies, credit operators and consumers in the Kingdom of Cambodia.

CBC has been operated since March 2012, with a strong support from the National Bank of Cambodia (NBC), the Association of Banks of Cambodia (ABC), the Cambodian Microfinance Association (CMA) and the International Finance Corporation (IFC). CBC promotes greater financial stability by providing accurate real time data to consumers and industry that helps them control the financial aspects of their businesses. It allows businesses to manage credit risk, prevent fraud and automate decision-making. CBC also helps individuals to check their credit report to ensure they have access to loans and finance and to protect themselves against identity theft.

CBC is a joint venture between Credit Bureau Holding Cambodia (represented by the ABC and CMA) and Equifax Cambodia Holding Pte. Limited (ECH) who has significant global footprint operating leading credit bureaus.  ECH is a Singapore incorporated company established as a joint venture between Asia Credit Bureau Holdings Pte Ltd (ACB), a Singapore-based company and Equifax company (United States).