Consumer Credit Index Report: Quarter 3, 2021 Released November, 2021

Summary of the Q3 report:

Consumer Credit Performance showed strong improvement as both number of loan account and loan balance recorded positive growth in all three main product types and regions. Similarly, Consumer Credit Applications increased significantly across all product types and regions. Last but not least, loan quality as measured by 30+ DPD ratio slightly improved as the ratio significantly dropped in Coastal region, although it increased across other three regions.

• Consumer Credit Applications

Consumer credit applications increased overall by +38%.

The most significant increase was reported in mortgage applications rising +39% from the previous quarter, followed by +38% increase in personal finance and credit card applications.

• Consumer Credit Performance

The total number of loan accounts saw a moderate increase by +1.65% bringing it to around 1.32 million accounts.

Outstanding balance grew by +5.84% to reach $11.37 billion by the end of the quarter.

• Consumer Credit Quality

30+DPD as a ratio of the total balance slightly dropped to 2.56%.

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 third quarter of 2021, the number of consumers attempting to acquire credit in three different forms – Personal Finance, Credit Card, or Mortgage increased in overall with the rate of +38%.  The largest jump was found in mortgage applications which rose by +39% with the highest increase of +47% in the Plain region. Both personal finance and credit card applications increased overall by +38%.

Meanwhile, the percentage change in the loan amount sought through credit application also went up by +45% which is significantly higher than that of the last quarter (2021 Q2: -35%) yet slightly lower compared to same quarter in previous year (2020 Q3: +57%). This was due to the increase in application amounts across all product types—Personal Finance +42%, Credit Card +63%, and Mortgage +56%.

Consumer Credit Performance:

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

As of September 2021, the number of consumer loan accounts moderately increased by +1.65% from previous quarter, resulting in 1.32 million total number of loan accounts throughout the country. Out of this number, 80.09% comprised of personal finance loans while a much smaller share was recorded for mortgage loans (11.60%) and credit card loans (8.30%). This increase was seen in all regions of the Kingdom (+4.1% in Plateau, +2.3% in Plain, +1.8% in Coastal, and +0.2% in Tonle Sap region).

Consumer loan balance continued to rise, increasing at +5.84% as of September 2021. By the end of the quarter, there was a total of $11.37 billion outstanding consumer loan balance.

Although mortgage loan shares only 11.60% of total loan accounts, in terms of amount it captured more than half of the total consumer outstanding loan balance with the share of 53.54%, whereas Personal Finance loans accounted for 45.83%. The share of credit card loans in terms of its outstanding balance remained low at 0.62%. In overall, loan balance saw a positive growth in all regions – Plain +6.5%, Coastal +5.8%, Plateau +4.5%, and Tonle Sap +2.9%.

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 marginally dropped to 2.56% in this quarter from 2.57% in the second quarter of 2021. Of all the three products, credit card had the highest 30+DPD with the ratio of 5.17%.

The 30+ DPD amount recorded an overall increase of +6% across the regions. The largest increase in 30+ DPD amount was seen in Plateau region with a surge of +13%. In addition, Tonle Sap and Plain regions saw increasing rate of +10% and +7% respectively, whereas Coastal region saw a drop of -21%.

The number of customers who held credit accounts with only one financial institution remained high at 73.14% of all customers. The remaining​ share of 26.86% represented those having relationship with multiple financial institutions.

The share of the number of customers holding only one loan account stood at 60.51%; those holding two accounts made up 27.40%; those holding three accounts made up 8.90%; and those with more than 3 accounts were only 3.19% of the entire credit customer base.

“The consumer credit market in this quarter saw significant improvement, showing relatively higher demand, after the slowdown in previous quarter”, said Mr. Oeur Sothearoath, CEO of CBC. He added that despite growth in credit applications and performance in consumer credit market, 30+ DPD ratio only dropped slightly from 2.57% in previous quarter to 2.56% in this quarter.

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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 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.