Loan disbursements on an uptick

Photo by: HENG CHIVOAN
The Kampot/Kep branch of ACLEDA bank is shown in June.

The Phnom Penh Post
Monday, 10 August 2009
Nguon Sovan

Cambodia’s major banks say loan disbursements rose in July after a months-long standstill in the sector, and the upwards trend – ‘likely to grow’ – bodes well for the second half of the year

Loan disbursements for Cambodia's major banks rose in July following flat sector performance in the first half of the year, officials said last week.

In Channy, president and CEO of ACLEDA bank, said Wednesday that the bank's loan disbursements in July increased 2.6 percent over last month's numbers.

"We saw that in July the demand for loans was high, rising US$12 million to $458 million for the year," he said. "This trend is likely to grow because of the farming season. People borrow money to invest in their crops."

He added that the bank's reduction of loan interest rates by 2 percent - to between 12 and 16 percent in June - also helped boost disbursement numbers.

"For the rest of the year, I predict that loan disbursements are likely to increase an additional $100 million," In Channy said.

The spike in disbursements coincided with a 26-percent rise in deposits, which hit $637 million in July, In Channy said, and followed months where loan levels had flatlined.

Collateral still vital
However, loan criteria have remained the same.

"Collateral for loans is still strict. On trade loans, we require collateral - land or buildings - or we cannot lend," In Channy said.

Yum Sui Sang, CEO of Union Commercial Bank, said Friday that concern over the global financial slump had begun to ease, and that loan demand was rising.

"The bank's loan disbursements increased 8.5 percent to $62.6 million in July, up from $57.3 million in June, while deposits rose 14 percent to $103.67 million this month from $89.09 million last month," he said.

Yum Sui Sang said loan disbursements were still low compared to deposits, but that the bank had no plans to lower criteria to boost loan numbers.

"Property used as collateral for loans is a must because at the moment, we must be extremely careful about offering loans to good customers," he said.

Stephen Higgins, CEO of ANZ Royal Bank, said by email Thursday that the bank does not disclose monthly numbers. "However, talking generally, we have a strong pipeline of new deals, so we are optimistic about the second half of this year," he wrote.

"We aren't really changing our criteria. Our main focus is on the strength of the customer's cash flows, and this has always been the case," he added.

Tal Nay Im, director general of the National Bank of Cambodia, said Thursday that disbursements had risen but did not cite specific figures.

"[Lending] may be tending to grow in the second half of this year," she said but declined to offer a reason.