MICROCAPITAL BRIEF: Borrowing in Cambodia from Microfinance, Commercial Banks Forecast to Increase by 147% to $14b by 2020

The latest outlook published by the Credit Bureau of Cambodia (CBC), a provider of credit information to organizations and consumers in Cambodia, forecasts that the total number of customers of microfinance institutions (MFIs) and commercial banks will increase from 1.9 million to 3.3 million individuals by 2020 and that these customers will borrow a total of USD 14 billion by that time, up from USD 5.7 billion [1].

The report also estimates that the number of loans from MFIs and commercial banks will grow by 159 percent from 1.5 million and 147 percent from 389,000 accounts, respectively, by 2020. The main segment of borrowers consists of those aged between 30 and 39 years, and that group is forecasted to remain the largest segment. Cambodians aged between 40 and 49 are predicted to be the main driver growth, however, with the number of loans projected to rise by 85 percent and 118 percent from MFIs and commercial banks, respectively. The average loan size is expected to grow from USD 1,180 to USD 1,500 for MFIs and from USD 12,800 to USD 16,700 for commercial banks [2].

As of February 2013, CBC processed an average of 158,000 credit inquiries per month from MFIs and commercial banks. It has generated 1.3 million credit reports since beginning operations in March 2012.

By Simon Pfanner – Research Associate

About Credit Bureau of Cambodia (CBC)

The Credit Bureau of Cambodia (CBC) is a provider of credit information to organizations and consumers in Cambodia. CBC was officially launched on March 19, 2012, and aims to promote financial stability in Cambodia by providing data to help with controlling credit risk, preventing fraud and improving the financial prospects of its clients. CBC is a joint venture between the Association of Banks Cambodia (with a stake of 30 percent), the Cambodia Microfinance Association (10 percent) and Veda Advantage Cambodia Holding Pte Limited (49 percent). As of February 2013, CBC processed an average of 158,000 credit inquiries per month from MFIs and commercial banks. It has generated 1.3 million credit reports since beginning operations in March 2012.

About Association of Banks in Cambodia (ABC):

The Association of Banks in Cambodia (ABC) was formed in 1994 to represent Cambodia’s private banking sector. According to its website, as of December 2013, ABC’s membership includes 35 commercial banks, 9 specialized banks and 16 members of the Cambodia Microfinance Association (CMA).

About Veda Advantage:

Veda Advantage is a private company that provides business solutions, data analytics and risk management tools for individuals and companies. Established in New Zealand in 1967, the firm specializes in credit-related services, focusing on the development of credit bureaus. Veda Advantage has supported credit bureaus in Cambodia, Malaysia, New Zealand, Saudi Arabia and Singapore. Financial information on Veda Advantage is not available.

Sources and additional information

[1] Phnom Penh Post, Loan growth to take off

[2] The Cambodia Daily, Credit Bureau Says Loans to Top $14b by 202

MicroCapital, April 3, 2012, Credit Bureau Cambodia (CBC) begins operations in Phnom Penh after four years of planning

MicroCapital, February 2, 2012, Credit Bureau Cambodia (CBC) launched to facilitate information sharing among banks, microfinance institutions

MicroCapital, May 10, 2011, National Bank of Cambodia (NBC), supported by International Finance Corporation (IFC), targets multiple borrowing by microfinance clients, expects to launch national credit bureau in 2011

MicroCapital, October 27, 2008, Cambodian Credit Bureau to Be Launched for Regulating Banking and Microfinance

MicroCapital Universe Profile: Credit Bureau of Cambodia (CBC)

MicroCapital Universe Profile: Association of Banks in Cambodia

MicroCapital Universe Profile: Veda Advantage

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

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