Consumer Credit Index Report: Quarter 2, 2021 Released July, 2021

Summary of the Q2 report:

Compared to previous quarter, Consumer Credit Performance saw only a marginal growth indicated by positive change in loan balance. Similar to same quarter in previous years, Consumer Credit Applications declined, showing relatively slower demand in the second quarter of the year. Meanwhile, the number of loan accounts dropped in all regions except Plateau. Loan quality reported a drop as measured by rising 30+ DPD ratio.

• Consumer Credit Applications

Consumer credit applications decreased overall by -34%.

The most significant decrease was reported in personal finance applications dropping -34% from the previous quarter, followed by -32% decrease in mortgage applications. Meanwhile, there was -25% decline in credit card applications compared to previous quarter.

• Consumer Credit Performance

The total number of credit accounts saw a marginal decline by -0.40% bringing it to around 1.30 million accounts.

Outstanding balance grew by +3.42% to reach $10.75 billion by the end of the quarter.

• Consumer Credit Quality

30+DPD as a ratio of the total balance rose to 2.57%.

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 second quarter of 2021, the number of consumers attempting to acquire credit in three different forms – Personal Finance, Credit Card, or Mortgage fell in overall with the rate of -34%.  The largest drop was found in Personal Finance applications which decreased by -34% with the highest decline of -37% in the Plain region. Mortgage applications decreased by -32% whereas credit card applications fell by -25%.

Meanwhile, the percentage change in the loan amount sought through credit application also went down by -35% which is significantly higher than that of last quarter (2021 Q1: -6%) yet relatively lower compared to same quarter in previous year (2020 Q2: -47%). This was due to the drop in application amounts across all product types—Personal Finance -39%, Credit Card -27%, and Mortgage -17%.

Consumer Credit Performance:

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

As of June 2021, the number of consumer loan accounts slightly decreased by -0.40% from previous quarter, resulting in 1.30 million total number of loan accounts throughout the country. Out of this number, 80.46% comprised of personal finance loans while a much smaller share was recorded for mortgage loans (11.26%) and credit card loans (8.27%). This drop was seen in all regions of the Kingdom (-1.4% in Coastal, and -0.4% in Pain and Tonle Sap regions) except Plateau region with the positive growth rate of +2.2%.

Consumer loan balance continued to rise, increasing at +3.42% as of June 2021. By the end of the quarter, there was a total of $10.75 billion outstanding consumer loan balance.

Although mortgage loan shares only 11.26% of total loan accounts, in terms of amount it captured more than half of the total consumer outstanding loan balance with the share of 52.47%, whereas Personal Finance loans accounted for 46.93%. 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 +4.4%, Plain +3.6%, Coastal +3.4%, and Tonle Sap +2.7%.

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 2.57% in this quarter from 2.24% in the first quarter of 2021. Of all the three products, credit card had the highest 30+DPD with the ratio of 5.83%.

The 30+ DPD amount recorded an overall increase of +18% across the regions. The largest increase in 30+ DPD amount was seen in Coastal region with a surge of +64%. In addition, Plain and Plateau regions saw increasing rate of +18%, whereas Tonle Sap saw +10% increase.

The number of customers who held credit accounts with only one financial institution remained high at 73.66% of all customers. The remaining​ share of 26.34% represented those having relationship with multiple financial institutions.

The share of the number of customers holding only one loan account stood at 61.09%; those holding two accounts made up 27.25%; those holding three accounts made up 8.69%; and those with more than 3 accounts were only 2.97% of the entire credit customer base.

“Similar to previous years, credit market in the second quarter normally slowed down. However, the drop in quarter-on-quarter growth of both number and amount of credit application is smaller compared to same quarter in 2020 when we witnessed major impact from the onset of the global pandemic”, said Mr. Oeur Sothearoath, CEO of CBC. He added that “The 30+ DPD ratio continue to rise to 2.57% indicating a drop in credit quality comparing quarter-on-quarter”.

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