Phnom Penh (FN), Aug. 23 – Cambodian Prime Minister Hun Manet affirmed that the Royal Government, coordinating with banking and microfinance institutions, has introduced various measures to ease the conditions and facilitate the loan restructuring for their clients.
The premier spoke on Thursday (Aug. 22) on the occasion of the 1st Anniversary of the Royal Government of the 7th Legislature of the National Assembly of Cambodia.
Premier Hun Manet said that the National Bank of Cambodia has discussed with private banks and microfinance institutions to find solutions to alleviate the burden of businesses, enterprises and individuals, while also increasing cash flow into the market.
As a result, in order to ensure adequate liquidity, the Royal Government, through the National Bank of Cambodia (NBC), has relaxed several conditions, enabling banking and microfinance institutions to inject more than USD 2.3 billion into the economy.
In addition, at the 19th Government-Private Sector Forum on 13 November 2023, the NBC reduced its monetary reserve requirements from 9% to 7% until the end of 2024, which will add more than USD 1 billion to the economy. The NBC has decided to extend this policy until 2025. Furthermore, the bank has agreed to relax provisions related to credit risk classification, allowing banks and microfinance institutions to restructure loans up to twice without classifying them as bad credit until the end of 2025.
Samdech Thipadei added that this approach will provide customers with more cash on hand to support their daily lives. For example, if individuals previously had to pay USD 500 a month to the bank, the new policies might allow them to pay only USD 300 to USD 400 in principal and interest, with the remaining USD 100 to USD 200 available for daily expenses.
The premier added that the NBC has also permitted banks and microfinance institutions to reduce their appraisal period from six months to three months, starting in the fourth quarter of 2024 and continuing until the end of 2025. This change will allow customers to request loan restructuring twice without negatively affecting their credit in the credit bureau or CBC system.
Premier Hun Manet further explained that for credit restructuring, banks and microfinance institutions have agreed on certain principles, including:
- Banks and microfinance institutions will make every effort to restructure loans at the request of qualified clients to alleviate the burden on those seeking to restructure their loans.
- Loan restructuring will be based on principles such as tax relief, cancellation of penalties, and no fees or late charges for principal amounts not yet repaid. However, customers will still be obligated to repay interest according to the loan restructuring measures.
- In cases where a customer pays late or wishes to cancel the loan, banking and microfinance institutions will waive penalties. Each institution and bank have also committed to helping clients understand that information on loan restructuring in the credit bureau system reflects the client’s history and is not an automatic reason for rejecting new credit applications.
In this regard, Samdech Thipadei urged the NBC, banks, and microfinance institutions to expedite the preparation of these procedures to enable qualified customers to restructure their loans promptly.
=FRESH NEWS
