Consumer Credit Index Report: Quarter 4, 2021 Released February, 2022

Summary of the Q4 report:

Consumer Credit Performance showed strong improvement as both number of loan account and loan balance recorded positive growth across the regions. Consumer Credit Applications, however, slightly dropped in this last quarter, compared to the previous ones, in terms of number of application. Last but not least, loan quality as measured by 30+ DPD ratio improved significantly as the ratio dropped across the regions.

• Consumer Credit Applications

Consumer credit applications decreased overall by -2%.

The drop was reported in personal finance applications declining -2% from the previous quarter. For credit card application and mortgage application, there were increase of +6% and +0.1%, respectively.

• Consumer Credit Performance

The total number of loan accounts saw a moderate increase by +2.20% bringing it to around 1.35 million accounts.

Outstanding balance grew by +4.58% to reach $11.89 billion by the end of the quarter.

• Consumer Credit Quality

30+DPD as a ratio of the total balance moderately dropped to 2.03%.

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 last quarter of 2021, the number of consumers attempting to acquire credit in three different forms – Personal Finance, Credit Card, or Mortgage decreased in overall with the rate of -2%.  The drop was found in personal credit application which fell by -2% with the largest drop of -3% in the Plain region. Meanwhile, credit card application and mortgage application rose by +6% and +0.1%, respectively.

The percentage change in the loan amount sought through credit application went up by +4% which is significantly lower than that of the last quarter (2021 Q3: +45%) and of same quarter in previous year (2020 Q4: +25%). The  increase was due to the increase in application amount of Personal Finance +8%, off-setting with the decrease of application amounts of Credit Card -3%, and Mortgage -10%.

Consumer Credit Performance:

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

As of December 2021, the number of consumer loan accounts moderately increased by +2.20% from previous quarter, resulting in 1.35 million total number of loan accounts throughout the country. Out of this number, 79.77% comprised of personal finance loans while a much smaller share was recorded for mortgage loans (11.82%) and credit card loans (8.41%). This increase was seen in all regions of the Kingdom (+5.1% in Plateau, +2.6% in Coastal, +2.5% in Plain, and +1.4% in Tonle Sap region).

Consumer loan balance continued to rise, increasing at +4.58% as of December 2021. By the end of the quarter, there was a total of $11.89 billion outstanding consumer loan balance.

Although mortgage loan shares only 11.82% of total loan accounts, in terms of amount it captured more than half of the total consumer outstanding loan balance with the share of 54.15%, whereas Personal Finance loans accounted for 45.13%. The share of credit card loans in terms of its outstanding balance remained low at 0.72%. In overall, loan balance saw a positive growth in all regions – Plateau +9.1%, Coastal +5.0%, Plain +4.8%, and Tonle Sap +2.6%.

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 moderately dropped to 2.03% in this quarter from 2.56% in the third quarter of 2021. Of all the three products, credit card had the highest 30+DPD with the ratio of 4.58%.

The 30+ DPD amount recorded an overall decrease of -17% across the regions. The largest decrease in 30+ DPD amount was seen in Coastal region with a drop of -24%, followed by Plain region with a decline of -19%, Plateau region and Tonle Sap regions with the drops of -14% and -9%, respectively.

The number of customers who held credit accounts with only one financial institution remained high at 72.47% of all customers. The remaining​ share of 27.53% represented those having relationship with multiple financial institutions.

The share of the number of customers holding only one loan account stood at 59.73%; those holding two accounts made up 27.66%; those holding three accounts made up 9.21%; and those with more than 3 accounts were only 3.40% of the entire credit customer base.

“The demand for consumer credit was slower in terms of the number of applications. However, consumer credit performance remained strong with an increase in both number of loan account and loan balance in this quarter, compared to the previous ones”, said Mr. Oeur Sothearoath, CEO of CBC. He added loan quality improved with a moderate decline in 30+ DPD ratio​ from 2.56% in previous quarter to 2. 03% in this last quarter of 2021.

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For further information, please contact:

Credit Bureau Cambodia (CBC)

Ms. THUN Sophorn

Tel: +855 86 999 754

E-mail:  s.thun@creditbureau.com.kh

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.