According to the CBC’s latest Consumer Credit Index Report, credit application continued to increase in Q4 after the seasonal drop in Q2 and bounced back in Q3 2017. In this quarter, the 3 products experienced growth, of which Credit Card application showed a significant increase of 94%. Non-performing loan ratio kept in good trend, continued to drop to 1.51% as of December 2017 which is slightly lower than same period last year while the outstanding balance had been increased by 44%.
Consumer Credit Application: represents the intention of consumers to acquire credit in terms of Personal Finance, Credit Card and Mortgage
In Q4 2017, consumer credit application continued to grow at +19% compared to +10% in the last quarter. The growth was driven by all the 3 products: Personal Finance application (+15%), Credit Card application (+94%), and Mortgage application (+62%). Interestingly, Credit Card application grew significantly which noticed the boost in Plain Region (+109%) mainly in Phnom Penh, and Tonle Sap Region (+35%) mainly in Siem Reap. Unlike the two regions, the Coastal Region and Plateau Region experienced decrease by -31% and -4% respectively in credit card application. On the Mortgage side, the growth mainly driven by Plain Region in particular Kampong Speu, Prey Veng, and Takeo respectively.
Consumer Credit Performance: indicates the situation of actual consumer loans as of the reporting quarter
Number of account disbursement seen as the 2nd highest growth after quarter 1. They rapidly speeded up by +6.40% growth in the last quarter of 2017 after slowdown in Q3 of +2.11% from +4.19% in Q2. As of December 2017, total loan accounts reached 2.69 million of which total consumer credit accounts was 843K (vs 801K Q3) represented 31%. Personal Finance still accounted for the largest share in consumer credit which was 81.08% following by Mortgage 11.24%, and Credit Card 7.68%.
Reflecting number of the account’s performance, the outstanding balance saw an increase of +8.70% compared to +7.85% in Q3 2017. This growth made the outstanding balance reached to USD 4.54 billion at the end of the quarter represented 28% of total loan in the market. Like number of account, Personal Finance was the biggest share to the total outstanding balance of 50.03%, while Mortgage noticed higher share of 49.11% (vs 47.93% as of Dec 16), Credit Card remains the smallest share of 0.86% (slightly increase from 0.83% as of Dec 2016). The same as last year, respectively Phnom Penh, Kandal, Siem Reap, Kampong Speu remained the leading area in term of outstanding balance for consumer credit.
Consumer Credit Quality: reflects the ability of debtors to meet their scheduled payments
Non-performing loans (NPL 30) have improved across all the regions compared to last quarter. The NPL 30 continued to drop from 1.61% in Q3 to 1.51% as of December 2017. Interestingly, the ratio is slightly lower comparing to Q4 2016 whilst the outstanding balance has grown by 44% from Q4 2016 to Q4 2017.
Multiple Loan Relationship: referring to customers who hold many loan accounts or/and split their loans with more than one financial institutions at the point of reporting time (consumer credit only)
The majority still remained with customers holding one loan account, which is 69.36% as of December 2017. It has moved back to 69.36% similar to Q2 & Q1 on customers holding 1-account, it slightly declined from 70.85% in Q3. As the result, we noticed higher in customers holding 2-account (22.65%), 3-account (6.17%) and >3-account (1.82%). Deeper analysis, customers who split loans with multiple financial institutions has slightly slowdown in 2017 compared to last year, customers have relationship with one institution was at 80.23% (81.22% in Q3 2017) whereas 79.80% as of December 2016. The rest 19.77% had relationship with more than one financial institution.
“Quarter 4 was the second highest growth in both number of consumer loan disbursement and its amount after Q1. It ended the year 2017 with total outstanding balance reached USD 4.54 billion, 44% growth from December 2016’s balance USD 3.16 billion. Total consumer credit outstanding balance remained similar to last year in term of share contributed by the 3 products, respectively Personal Finance (50.03% Q4 2017 vs 51.23% Q4 2016), Mortgage (49.11% Q4 2017 vs 47.93% Q4 2016), and Credit Card (0.86% Q4 2017 vs 0.83% Q4 2016). Year on year growth rate on outstanding balance 2016/2017 by product: Personal Finance (40%), Mortgage (47%), and Credit Card (48%). Non-performing loan ratio remained in the positive trend, it has improved to 1.51% as of December 2017 which was slightly lower if compared to last year whilst the outstanding balance has significantly increased by 44%. This indicates the healthier loan performance in overall and we expect to see a decreasing NPL ratio through our support with a full suite of comprehensive solutions that enable financial institutions to closely monitor their loan portfolio in real time.” said Mr. Sothearoath Oeur, Chief Executive Officer of Credit Bureau Cambodia.