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MicroFinance: $817 million of loans approved for restructure

Sorn Sarath / Khmer Times Share:
$817 million of loans have been restructured for more than 180,000 customers among a total of nearly 200,000 customers who have requested assistance since May. KT/Pann Rachana

Cambodia’s microfinance institutions (MFIs) have approved loan restructures valued at almost $817 million for more than 180,000 customers among a total of nearly 200,000 customers who have requested assistance since May, according to the Cambodia Microfinance Association (CMA).

Figures from the CMA show that as of May 31, there were 196,307 customers (among a total of 2.6 million customers in the country) with MFI loans that had applied for restructuring, with 180,301 of those customers now approved.

Kaing Tongngy, spokesperson for the CMA, said that currently only four priority sectors have been approved for loan restructuring. These include tourism, construction, transportation and the garment industry with the association now going to add agriculture as a fifth sector too.

“If the situation keeps as it is, we expect that in the next two months, the number of requests will slow down because customers can operate their business as usual,” he said.

PRASAC Executive Vice-President and Chief Marketing Officer Say Sony said that as of last week, his company had restructured 12,770 customers from a total of 13,000 who had made requests with loans valued at $143 million.

“Before most of our clients were from the tourism sector in Siem Reap, but now we have requests from almost all affected sectors in the country. We are also providing loan restructures for a household whose children have lost their jobs in a garment factory as well,” he said, adding that PRASAC will continue to provide loan restructure until December this year.

“That said, we have now noted that the number of customers who have sought loan restructures have seemed to decrease because some of them have restarted their business and now able to meet their repayments according to schedule,” he said, adding at the same time, PRASAC still provides loans to clients as per normal with special offers to small and medium enterprises.

He said during the COVID-19 pandemic, PRASAC’s portfolio actually grew about 6 percent compared with last year from $ 2.501 billion on Dec 31, 2019 to $ 2.651 billion as of June 3.

“On behalf of the management and staff of PRASAC, I would like to thank all the borrowers and depositors who have supported and used PRASAC’s financial services,” he said.

National Bank of Cambodia (NBC) issued a directive in March to all banks and financial institutions to restructure loan repayments to maintain financial stability, support economic activity and ease the burden of debtors facing major revenue declines caused by the COVID-19 outbreak.NBC then requested financial institutions to reduce credit-related fees and lift fines until the end of December 2020, according to a letter it wrote.

Dr In Channy, president and group managing director of ACLEDA Bank Plc, said: “Banks need to work on a long-term cooperation with clients. ACLEDA has worked with its clients for more than 20 years and we cannot run away from each other when we meet difficult circumstances,” he said.

However, banks and MFIs do need to follow NBC’s guidelines for loan restructures.

“During this time we also continue to provide loans to customers while also following up and recording all affected business performance to ensure that we can help them get the solution they need. This will be implemented through until December this year,” he added.

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