The Cambodia Microfinance Association agreed to reduce the time it takes for collateral to be returned to borrowers after they pay off loans.
The association set the maximum time to return collateral to borrowers after they have fulfill their obligations at three working days. Previously, microfinance institutions returned collateral in 10-15 working days.
The decision was made during the association’s annual general assembly, which took place in Phnom Penh yesterday.
“I would like to ask for cooperation and agreement from all members to implement this policy so that we can save our clients time,” said Suon Pisey, chairman of the association’s operation club and chief business officer at AMK.
Huot Leng Tong, chairman of the Cambodia Microfinance Association, said all members were in accordance with the new policy.
“I agree with this new policy 100 percent. Now we need all the members to implement it,” he said.
The loan portfolio in Cambodia’s MFI sector reached $4 billion in 2017, amounting to an increase of 25.5 percent year-on-year, according to the National Bank of Cambodia.
Most loans were taken out by small entrepreneurs in the agriculture sector (26.9 percent), retail (18.6 percent), service (10.3 percent), logistics (4.5 percent) and construction (3.3 percent). About 33 percent of total loans in the sector were used for non-commercial purposes. The report also showed that the total deposit portfolio grew by 35.6 percent, reaching $2.02 billion.