Consumer Credit Index Report: Quarter 1, 2021 Released April, 2021

Summary of the Q1 report:

Consumer credit data in Q1 2021 indicates that Consumer Credit Performance​ showed consistent improvement as both loan balance and the number of loan accounts sustained positive growth. Meanwhile, the growth in Consumer Credit Applications slowed down compared to previous quarter as amount of credit enquiry dropped despite the rise in the number of credit enquiries. Finally, there was a drop in Credit quality as the amount of late repayments 30 days past their due date (30+ DPD) increased across all regions with the highest increase in Plateau region and mortgage category.

• Consumer Credit Applications

Consumer credit applications increased overall by +11%.

The most significant increase was reported in mortgage applications surging +15% from the previous quarter, followed by +11% increase in personal finance applications. Meanwhile, there was -30% decline in credit card applications compared to previous quarter.

• Consumer Credit Performance

The total number of credit accounts saw a marginal increase by +2.05% bringing it to 1.30 million accounts.

Outstanding balance grew by +6.44% to reach $10.39 billion by the end of the quarter.

• Consumer Credit Quality

30+DPD as a ratio of the total balance rose to 2.24%.

The majority of credit customers remained committed to a single financial institution and held only a single account.

Consumer Credit Applications

This metric represents intention of consumers to acquire credit in the form of Personal Finance, Credit Card, or Mortgage.

In the first quarter of 2021, the number of consumers attempting to acquire credit in three different forms – Personal Finance, Credit Card, or Mortgage increased moderately in overall with the rate of +11%.  The largest increase was in mortgage applications which increased by +15% with the highest increase of +46% in the Coastal region. Personal finance applications increased by +11% whereas credit card applications decreased by -30%.

However, the percentage change in the loan amount sought through credit application fell by -6% despite positive growth last quarter (2020 Q4: 25%) as well as in the same quarter in previous year (2020 Q1: 1.3%). This was due to the drop in application amounts across all product types—credit card -23%, personal finance -6%, and mortgage -4%.

Consumer Credit Performance:

This metric indicates the volume of consumer loan as of the reporting quarter reflecting an active credit market.

As of March 2021, the number of consumer loan accounts increased by +2.05% from the previous quarter, resulting in the total number of loan accounts throughout the country going up to 1.30 million. Out of this number, 80.92% comprised of personal finance loans while a much smaller share was recorded for mortgage loans (11%) and credit card loans (8.09%). This increase was seen in all 4 regions of the Kingdom, +5.2% in Plateau, +3.2% in Coastal, +1.9% in Tonle Sap and Plain regions.

Consumer loan balance continued to rise, increasing at +6.44% as of March 2021. By the end of the quarter, there was a total of $10.39 billion outstanding consumer loan balance.

Although the number of mortgage loan accounts shares only 11% of total loan accounts, in terms of amount, it captured more than half of the total consumer outstanding loan balance with the share of 51.72%, whereas personal finance loans accounted for 47.68%. The share of credit card loans in terms of its outstanding balance remained low at 0.60%. In overall, loan balance saw a positive growth in all regions – Plateau +9.9%, Plain +6.3%, Tonle Sap +6.0%, and Coastal +8.4%.

Consumer Credit Quality:

This metric is measured by taking the ratio of loan accounts with late repayments 30 days past their due date, indicated as 30+ DPD. It indicates the creditworthiness and risk of default within the reporting quarter.

The instance of 30+DPD increased to 2.24% this quarter from 1.91% in the last quarter of 2020. Of all the three products, credit card had the highest 30+DPD with the ratio of 4.36%.

The 30+ DPD amount recorded an overall increase of +25% across the regions. The largest increase in 30+ DPD amount was seen in Plateau region with a surge of +43%. In addition, Plain, Coastal, and Tonle Sap regions saw increasing rate of +29%, +27%, and +11% respectively.

The number of customers who held credit accounts with only one financial institution remained high at 73.63% of all customers. The remaining​ share of 26.37% represented those having relationship with multiple financial institutions.

The share of the number of customers holding only one loan account stood at 61.01%; those holding two accounts made up 27.23%; those holding three accounts made up 8.73%; and those with three or more accounts were only 3.03% of the entire credit customer base.

“In the first quarter of 2021, the performance of consumer credit market was relatively strong with consistent quarter-on-quarter growth in credit applications and credit performance”, said Mr. Oeur Sothearoath, CEO of CBC. He added that “However, the 30+ DPD ratio rose to 2.24%indicating a drop in credit quality”.

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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

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 was launched in March 2012, with 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) Limited (CBHC) and Equifax Cambodia Holding Pte Limited (ECH). CBHC represents ABC, CMA, ACLEDA Bank Plc, Union Commercial Bank Plc and First Commercial Bank Plc. ECH is a joint venture between Credit Bureau Asia Holdings Pte Ltd (Singapore-based company) and Equifax Inc. (United States-based company) that collectively have a significant global footprint operating leading credit bureaus.