Banks loan almost $4bln to the property sector

Sum Manet / Khmer Times No Comments Share:
Banks have been issuing loans for both developers and home buyers. KT/Chor Sokunthea

Bank loans to the construction and real estate sector in Cambodia in 2017 totaled $3.91 billion, or the equivalent of about 24.28 percent of the total loan portfolio at the end of 2017.

According to the National Bank of Cambodia’s (NBC) report received by AKP state news agency on Monday, loans for construction amounted to $1.52 billion, personal loans for house purchases were valued at about $1.48 billion and loans granted for the real estate trade was worth $917 million.

“According to the NBC, in the construction sector, investment flows and rising demand, especially the growth of middle-income people, have contributed to the growth of the sector and continue to grow in 2018, but at a slower pace,” AKP said.

Growth in the construction sector was also supported by credit growth for the sector, which remained at a high of 35 percent, similar to the last five years, despite a small decrease of growth.

As of the end of 2017, the total bank loans in Cambodia was $16.10 billion, up 16.8 percent from the end of 2016. The report also shows that by the end of 2017, there were 39 commercial banks, 15 specialised banks and six foreign bank representative offices.

So Phonnary, the Executive Vice President and Group Chief Operations Officer at Acleda Bank, said the construction sector in Cambodia saw good growth in 2017, compared with the previous year.

“Acleda’s home loans were worth about $208 million and home improvement loans were about $70.3 million in 2017,” Mrs Phonnary said. “Both loan types were about nine percent of the bank’s total loans.”

The interest rate of the loans is 18 percent per year, so it is about 1.5 percent per month, according to Mrs Phonnary.

Housing loans are provided in US dollars and Acleda Bank provides housing loans of up to $300,000, but not more than 70 percent of the house price, and the maximum loan period is 15 years, she said.

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