Credit applications keep increasing, outstanding balance and non-performing loans remain stable

Published Date: Friday March 31st, 2017

Phnom Penh, February 14th, 2017

According to the CBC’s latest Consumer Credit Index report, credit has kept increasing in Q4 2016, contrary to trends which generally show a slowdown in Q4.  Credit cards applications came back to a normal growth after a sharp increase in Q3, and non-performing loans kept their low and stable level.

Consumer Credit Application: represents the intention of consumers to acquire credit in terms of personal finance, credit card or mortgage

When seen from a yearly perspective, quarters 2 and 4 usually observe a decrease in credit applications. This year, applications kept increasing (+13% in number, +1% in value), with an equal growth between all three types of credit applications: personal finance, credit cards and mortgage. The Plateau region seems to have singular behaviors: the area went through a high rise in mortgage applications (+84% in Q4, +109% in Q3), and is the only region with a slowdown in credit card applications (-22% in Q4 vs. +96% in Q3).

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

The number of accounts has increased every quarter since the beginning of the year, but at a slower pace: from an evolution of 11.44% during Q1 and 7.86% during Q2, it has now only increased by 1.8% compared to the previous quarter. The total number of consumer loan accounts remains stable: 679K, composed by 85% of personal finance.

The outstanding balance ($3.16B) – that has had a very quick growth in Q3 – remains stable, with a 4% increase. It is still divided between Personal Finance (51%) and Mortgage (48%), while credit cards still represent a very small share.

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

The Cambodian landscape remains stable regarding non-performing loans, loans for which the debtor has not been able to meet its scheduled payments for more than 30 days (NPL 30).

It has increased by 1.52% in Q4 vs. 1.48% in Q3. Almost 80% of Cambodians are still committed to a single financial institution, which minimizes the risk of default payment.

 “When we look at the latest results from a yearly perspective, we can see that credit applications have increased both in number (22%) and in value (31%) in 2016, compared to 2015. December 2016’s outstanding balance has also increased by 32% compared to last year”, says Mr Sothearoath Oeur, Interim Chief Executive Officer at the CBC, analyzing the big picture.