Cambodia & Economy: Credit to individuals up, loans to small businesses down

The latest report from Credit Bureau Cambodia (CBC) reveals a mixed picture of the credit market in Cambodia. While retail credit is showing positive growth, lending to small businesses is declining.

Fruit seller on the market in Phnom Penh. Photo CG

The total number of loans to individuals rose by 4.75% to around 1.92 million at the end of June 2024. Outstanding loans to individuals rose by 0.67% to a total of $15.31 billion.

The growth was largely due to mortgage and credit card applications, which increased by 17% and 15% respectively compared with the previous quarter.

However, there are signs of a decline in the quality of personal loans. The proportion of loans in arrears for 30 days or more rose from 6.03% in the first quarter to 6.22% in the second.

The number of small business loans fell by 1.7% to a total of around 1.86 million. Overall loan balances rose only marginally by 0.1% to $34.22 billion. Applications for credit from small businesses fell by 7%, with significant declines in applications for working capital, asset finance and construction loans.

Applications for working capital loans fell by 11%, asset finance by 9% and construction by 14.2%. The only category to show growth was agricultural credit, with an increase of 2.7%.

Loan quality in the small business sector also showed signs of strain. The DPD 30+ ratio for small business loans rose from 7.8% in the first quarter to 8.3% in the second. The construction sector, in particular, posted the highest ratio (15.3%).

Credit Bureau Cambodia (CBC) is the leading provider of financial information, analytical solutions and credit assessment services to financial institutions and consumers in Cambodia.