PM Defends Interest Rates
May 16th, 2013, The Phnom Penh Post, Banking & Finance, Borrowing, Debt Servicing, Economics, Financial Services, News Source
Prime Minister Hun Sen yesterday lashed out at the opposition party’s concerns over the interest rates charged by commercial banks to farmers.
SRP lawmaker Yim Sovann said commercial banks in Cambodia charge customers very high interest rates, and said it is much higher than in other countries. …
However, the premier, speaking at the opening of a new rubber processing plant in Stung Treng province said Sovann’s words do not apply with the market practice and the real situation in Cambodia’s economy. …
“Based on the market economy, they don’t allow the state to handle commercial bank. We have a national bank which cannot provide that serivce to customers. If people have money to deposit at the bank, they will get five per cent, some give four per cent and other 5.6 per cent [interest rate],” said Hun Sen. …
“To lower the interest rate to one per cent, it would kill the bank … They are against the political protectionism,” he said. …
According to the statistics from the National Bank of Cambodia, the Kingdom’s 32 commercial banks have lent $5.49 billion to about 1.6 million borrowers by November 2012, up 30 per cent year-on-year. …
Chhay Channyda and David Boyle
http://www.phnompenhpost.com/2013051665645/Business/pm-defends-interest-rates.html
Mortgage Lending Rises for New Home-Buyers
April 25th, 2013, The Cambodia Daily, Banking & Finance, Borrowing, Debt Servicing, Financial Services, Real Estate
Cambodians, particularly young adults, are more often turning to banks to help them buy their homes, according to figures obtained from the National Bank of Cambodia (NBC) yesterday. …
From $179 million in 2008, the total sum lent out to those buyers fell to $94.5 million in 2009, the figures show. But in 2012, home loan lending reached $329.5 million – a 20 percent increase on the previous year – and by February it was at $344.5 million, according to the NBC. …
Acleda, the country’s biggest lender, has seen the number of borrowers getting home loans increase from 2,422 in 2010 to more than 4,550 in March, with the value of the bank’s outstanding home loans reaching $97 million. …
Simon Lewis
http://www.cambodiadaily.com/business/mortgage-lending-rises-for-new-home-buyers-20083/
Holdings draw veil over Mfone
April 18th, 2013, The Phnom Penh Post, Banking & Finance, Business & Commercial Development, Debt Servicing, Economics, Industry, International Relations, Social Concerns, Telecommunications
When the owner of Kingsland garment factory fled the Kingdom last year, enough pressure was applied to its sourcing companies H&M and Walmart to persuade them through their intermediaries to compensate workers left jobless. Distance could no longer absolve them of responsibility.
Just like the Kingsland employees who took their protest to the US and Swedish embassies to lobby Walmart and H&M, former Mfone employees took their protest to the Thai and Singapore embassies last week to apply pressure on the parents of the failed Cambodian company. …
For Dave Welsh, country director for the American Centre for International Labour Solidarity, companies that are inextricably linked to failed organisations should also be held to account. …
“Look at the corporation as whole, not just at Mfone. Look at the corporate links in Singapore and Thailand,” Welsh said. “The analogy of the situation is H&M and Nike aren’t incorporated in Cambodia, but they are morally, if not legally, on the hook for things that happen in their factory.” …
Daniel de Carteret
http://www.phnompenhpost.com/2013041865106/Business/holdings-draw-veil-over-mfone.html
Long-overdue Consolidation of the Kingdom’s Mobile Telecoms Market May Have Operators Feeling Hopeful, but Challenges Remain
April 15th, 2013, Southeast Asia Globe, Banking & Finance, Business & Commercial Development, Debt Servicing, Domestic Investment, Economics, Foreign Investment, Industry, Telecommunications
After years of immersion in a vicious price war, battle weary and capital-haemorrhaging [sic] mobile operators in Cambodia’s oversaturated telecommunications sector may finally have reason to breathe a sigh of relief; 2013 might be cited as the year the tide turned. …
Tarred by legal threats, unfair competition practices, trash-talking in the media and engagement in cripplingly expensive advertising campaigns, the industry’s ugly side has reared its head on several occasions since the market started overcrowding in 2006. Yet recent and long overdue consolidations in the market have some chief executives trading their swords for confetti, handshakes and electric-light breakdancers.
With over five million subscribers, Smart is now the second-largest operator in the country behind Metfone, owned by Viettel, a military-backed Vietnamese-owned telecommunications firm. Smart plans to expand its network and operational coverage throughout Cambodia and reinvigorate investors to develop infrastructure, says [Thomas] Hundt. [CEO of the repackaged brand ‘Smart’]. All the while the merger removes interconnection fees between Hello and Smart mobile users – a blessing in a market that operators claim is under-regulated and where complaints have been filed against companies that have not paid interconnection fees. …
With the industry reduced to six active operators, experts and mobile operators agree that the two developments have birthed new life into a market that, until now, has sustained multimillion-dollar losses each year. Revenues from phone usage in the Kingdom remain low, while an infant smartphone culture yields limited capital from data plans. …
The merger followed hot on the heels of Thaicom’s announcement that its lawsuit-laden subsidiary Mfone, which had been operating in Cambodia for two decades, was insolvent. …
“I think that this had to happen… The market can now begin to move at a level with more sustainable competition finally, and in the long term we won’t see any more of these crazy price wars,” said Marc Einstein, an independent telecom analyst. “I think in a market the size of Cambodia, in terms of population and GDP [gross domestic product], you can only have three, maybe four operators for the sector to be sustainable.”…
“I would say that because of the initial rush of entrants, the equipment was improved substantially, but… now quality is definitely toward the bottom compared to Thailand or Vietnam,” Einstein said. …
At first, services improved. But as huge promotions became the industry standard, the price of a domestic call dropped to just $0.01 per minute, far below Thailand’s $0.05 to $0.06 per minute and around $0.15 per minute paid in Hong Kong. …
“The problem is that, even at six players, there is still going to be a price war at a high level of competition,” said Dimitry Bushik, chief commercial officer at Excell, one of Cambodia’s mobile operators. …
Philip Heijmans
http://sea-globe.com/united-we-stand/
Creditors, Court in Dispute over Mfone Case
April 12th, 2013, The Cambodia Daily, Banking & Finance, Business & Commercial Development, Debt Servicing, Economics, Industry, Infrastructure, International Relations, Social Concerns
A court administrator and creditors who have filed complaints against bankrupt mobile operator Mfone are at loggerheads over whether or not to overturn two injunctions filed against the firm to stop it selling off its assets.
“The judges are now considering to drop the injunctions because we cannot delay any more as the price of Mfone’s assets continue to decrease each day,” Ouk Ry, the court- appointed administrator charged with overseeing Mfone’s liquidation proceedings, said yesterday at a meeting with 100 creditors at Mfones shuttered offices on Moniviong Boulevard. …
But those who filed complaints against Mfone say they do not want injunctions the injunctions lifted before the court orders Mfone to pay them what they are owed. …
Aun Pheap and Joshua Wilwohl
http://www.cambodiadaily.com/business/creditors-court-in-dispute-over-mfone-case-18654/
New Mortgage Program Helps Cambodia’s Poor Find Better Homes
April 4th, 2013, 90.9 WBUR News Station, Banking & Finance, Borrowing, Business & Commercial Development, Debt Servicing, Economics, Financial Services, Industry, Technical Assistance
If you’ve applied for a mortgage recently, you know how hard it can be. The bank demands all kinds of obscure documents and wants proof of almost every asset you own. But an innovative mortgage program halfway around the world will evaluate your application without any extra documentation — and if you’re approved, it will give you a 15-year fixed-rate mortgage. There’s just one catch: The mortgages are only for low-income people in Cambodia. The program is a throwback to the days when bankers got to know their customers — and trusted them. …
Keng and her husband both work. She makes and then sells rice soup at a street stall, while her husband sells clothes at another stall. But they don’t meet one of the crucial requirements for getting a mortgage: They don’t receive salary slips or other financial documents, so they don’t have what bankers call “verifiable income.” …
Late last year, Keng heard about an unusual bank called First Finance, which was designed specifically to give mortgages to low-income people like her. She and her family could already imagine the new home they wanted to buy: a two-story house with indoor plumbing. It would cost about $20,000. …
The First Finance mortgage program in Cambodia was the brainchild of Talmage Payne …
Microfinance, he says, was not the solution. People needed much bigger, long-term loans to buy homes. Payne also says he realized something else that contradicts traditional banking assumptions: Low-income families make great mortgage customers.
Just about everybody in a typical Cambodian family works. The wife might run a market stall, while the husband does day labor.
“Grandma sells peanuts, the kids work,” Payne says.
As a result, many of the families are financially resilient. If one person has to stop working, the others can chip in.
“You’re giving somebody something that they never thought they could have. So no matter what the hardship is, what’s the one bill they’re not going to miss? They’re not going to miss the mortgage,” Payne says. …
Daniel Zwerdling
http://www.wbur.org/npr/176121367/new-mortgage-program-helps-cambodias-poor-find-better-homes
When Is Credit Growth Too Fast and How To Deal With It?
April 1st, 2013, Cambodian Business Review, Banking & Finance, Borrowing, Business & Commercial Development, Debt Servicing, Economics, News Source
Cambodia’s financial system appears to be shifting to excessive credit growth. …
The credit-to-GDP ratio has reached 37 percent, well above the low-income economies (LTCs). If credit growth were to continue at the current pace, by mid-2013 the ratio would exceed even the median for more advanced emerging market economies (EM). …
In considering macroprudential measures, the NBC must strike a balance between choosing an instrument that is simple to implement, effective in lowing credit growth, and causes the leas distortions to the credit market. …
Cambodia Business Review, P.12
www.cambizreview.com
Mfone’s Licence Revoked; Staff Terminated
March 29th, 2013, The Cambodia Daily, Banking & Finance, Business & Commercial Development, Debt Servicing, Economics, Industry, International Relations, Labor, Telecommunications
The Ministry of Post and Telecommunications has revoked the operating licence of bankrupt phone operator Mfone, which went out of business two months ago, while more than 1,000 employees had their jobs officially terminated yesterday.
The revocation of the licence and the mass dismissal of the staff helped clear the way for the government-appointed administrator, Ouk Ry, to dissolve the company’s assets and repay some of the company’s debts, which are believed to top $160 million. …
A copy of the TRC notice, obtained yesterday, also states that Mfone owes the Ministry of Post and Telecommunications $743,332. …
Nim Solyda, a former engineering supervisor at Mfone and the employee’s representative, said the employees had filed a claim earlier this month for about $4.4 million in compensation for 1,092 workers.
“The Labor Law states that even though the company is bankrupt, they must still pay compensation,” he said. …
Two of Mfone’s largest creditors are Chinese telecommunications firm Huawei Technologies and Norwegian Company Elteck, who claim a total of $68.73 million in debts from Mfone.
The Phnom Penh Municipal Court had issued injunctions on behalf of both companies, and on Monday, the two firms discussed dropping their injunctions in order to allow Mr. Ry, the administrator, to dispose of Mfone’s assets quickly in order to pay off the company’s debts. …
Aun Pheap and Joshua Wilwohl, P.21
http://www.cambodiadaily.com/business/mfones-license-revoked-staff-terminated-16474/
Creditors Claim $160 Million in Mfone Debts
March 28th, 2013, The Cambodia Daily, Banking & Finance, Business & Commercial Development, Debt Servicing, Economics, Industry, International Relations, Telecommunications
Thousands of creditors have come forward alleging they are owed a combined $160 million by bankrupt mobile phone operator Mfone, the administrator appointed to the case said yesterday.
“Mfone owes money to hundreds of companies and thousands of individuals totaling $160 million,” he said. …
Nim Solida, a former engineer supervisor at Mfone who attended the meeting, said that the administrator had estimated the company’s remaining assets to be worth just $105 million. …
Phorn Bopha and Aun Pheap, P.19
http://www.cambodiadaily.com/business/creditors-claim-160-million-in-mfone-debts-16379/
ADB praises Cambodia for public debt management
March 27th, 2013, The Cambodia Herald, Banking & Finance, Business & Commercial Development, Debt Servicing, Economics, Financial Services, Foreign Aid, International Relations, Technical Assistance
Eric Sidgwick, Country director of the Asian Development Bank (ADB) to Cambodia applauded Cambodia for managing it’s, sometimes problematic, public debts. …
During the Wednesday meeting with Deputy Prime Minister, Sok An, Eric Sidgwick said, good management led to the positive changes of donations and loans to Cambodia. …
The government, with the collaboration of ADB, aims to increase the GDP of its citizens to $4,000 by 2030, he added.
The Cambodia Herald Staff
http://www.thecambodiaherald.com/cambodia/detail/1?page=13&token=NDQ1NmJhNTk1M2V
Evicted Railway Families Facing Debt ‘Crisis’
March 22nd, 2013, The Cambodia Daily, Banking & Finance, Borrowing, Business & Commercial Development, Construction, Debt Servicing, Disputed Land, Economics, Foreign Aid, Industry, Infrastructure, International Relations, Land Tenure, Social Concerns
Debt levels among the more than 1,000 families being evicted by a $142.6 million railway project bankrolled by Australia and the Asia Development Bank (ADB) have reached “crisis” proportions and require major intervention, according to a U.S resettlement expert who was hired by the ADB to study the impact of the project. …
In his recommendations, Mr. Cernea, said that evicted families were in many cases at risk of losing their new government-issued plots of land to moneylenders and that families falling into debt was “the single most dangerous risk” facing the resettled families. …
Among his recommendations was an immediate stop to evictees being able to swap their new land for loans, a thorough census of the families and their debts, and that the ADB and Ausaid work with the government on a “full, project-scale” solution.
He also questioned whether it was legal for the money lenders to take the families’ new plots of land as collateral and urged the partners in the project to see what they could do to nullify the loan deals or at least punish the lenders. …
Nhean Leang, who sits on the government’s resettlement committee, claimed that of the more than 4,000 families affected by the rail project, only 25 were actually being hurt and shifted any blame to the ADB and the families themselves.
“You should ask the ADB about the design, how they designed it. We just follow the designs of the Ministry of Transportation and the ADB,” he said. …
Zsombor Peter
http://www.cambodiadaily.com/news/evicted-railway-families-facing-debt-crisis-15618/
Cambodia’s Economic Growth Will Help Poverty Reduction
March 10th, 2013, South East Asia Weekly, Agriculture & Agri-business, Banking & Finance, Borrowing, Business & Commercial Development, Construction, Debt Servicing, Economics, Exports, Farming, Financial Services, Fishing, Foreign Investment, Garment Industry, Industry, Infrastructure, International Relations, Production, Rice, Tourism, Trade
Cambodia economic growth was 7.3 percent in 2012. …
Agriculture grew by 4.3 percent, crops by 4.9 percent, fisheries by 6.7 percent, industry by 9.2 percent, garment [sector] by 6.9 percent and the service industry by 8.1 percent, said Dr Hang Chuon Naron, Secretary of State for the Ministry of Finance of Cambodia. …
Moreover, gross domestic product per capita increased from 760 US dollars in 2008 to nearly 1,000 US dollars in 2012, with a projection of $1080 in 2013, he stresses [sic]. …
Cambodia’s rice export reached almost 180,000 tons in 2011 and 187,000 tons in 2012 of which more than 8 percent was exported to the EU. …
During the first 11 months of 2012, rubber exports increased by 23.9 percent … although value decreased by 19 percent down from a total of $181.1 million to $146.7 million.
In 2012, tourist arrivals increased by 24.4 percent to reach over 3.5 million from 2.88 million in 2011. …
Garment exports increased by 17.4 percent from $4.2 billion in 2011 to $5 billion in 2012. …
In 2012 … some 1980 construction projects worth $1.6 billion were approved. … The increase in the number of projects [displays] a steady recovery of the real estate sector, Mr Naron adds.
He also said [tax revenue] is estimated to increase by 27 percent to 2, 5 01 reil ($625 million) in 2012. …
Microfinance has experienced rapid growth over the last five years, reaching 1.3 million borrowers and 1.1 savers in 24 provinces. …
Cambodia’s trade volume reached $12.4 billion in 2012 while Cambodia’s export was worth 5.58 billion in 2012 [Dr. Hang Chuon Naron stated].
The South East Asia Weekly Staff, P.1
http://thesoutheastasiaweekly.com/
(Note: Infrequently Updated.)
National Bank of Cambodia Reports Lending Surge in 2012
February 24th, 2013, The Cambodia Daily, Banking & Finance, Debt Servicing, Economics, Financial Services, News Source
Lending by commercial banks in Cambodia grew by more than one-third last year, according to figures provided by the National Bank of Cambodia (NBC) yesterday. …
Banks lent out a total of $5.89 billion in 2012, compared with $4.39 billion in 2011, NBC figures show, meaning that credit growth was massive 34.2 percent in the year. …
Simon Lewis
http://www.cambodiadaily.com/business/national-bank-of-cambodia-reports-lending-surge-in-2012-11368/
Loans and deposits climb
February 5th, 2013, The Phnom Penh Post, Banking & Finance, Borrowing, Business & Commercial Development, Debt Servicing, Economics, Industry
Loans and deposits at Cambodia’s 32 micro-finance institutions and four NGOs, as well as small loans from Acleda Bank, rose sharply last year compared with a year earlier.
Industry players say this is a result of the Kingdom’s rapid economic improvement and political stability.
Official data from the Cambodia Microfinance Association (CMA) shows the value of loans outstanding rose about 38 per cent to $890 million in 2012, compared with $644.6 million in 2011. …
In early January, the International Monetary Fund highlighted Cambodia’s high domestic credit growth, which the IMF considered a risk, but officials and industry insiders raised no concerns about it last week. …
May Kunmakara
http://www.phnompenhpost.com/2013020461166/Business/loans-and-deposits-climb.html
Last Year Saw More New Firms Register
January 29th, 2013, The Cambodia Daily, Banking & Finance, Business & Commercial Development, Debt Servicing, Domestic Investment, Economics, Exports, Foreign Investment, Imports, News Source, Trade
Almost 3,400 new businesses were registered in Cambodia in 2012, an increase of 9 percent on the previous year, according to figures from the Ministry of Commerce.
In 2012, the ministry’s business registration department recorded some 3,385 new companies, compared with 3,104 new companies in 2011, the figures released by the ministry last week show.
The business registration department’s director, Him Hean, said about 60 percent
of companies were local firms, and 40 percent were companies set up in Cambodia by foreign investors. …
Phok Dorn and Simon Lewis, P.21
www.cambodiadaily.com
Cambodia faces risks from a credit boom, the IMF warns
January 9th, 2013, BBC News, Banking & Finance, Borrowing, Business & Commercial Development, Debt Servicing, Economics, Financial Services, Industry, International Relations
The International Monetary Fund has warned that a credit boom in Cambodia poses a threat to economic growth.
Banks have been cutting interest rates to win customers and private sector credit has increased by almost a third in the past 12 months, the fund said.
This means that borrowing levels are now equal to 37% of the country’s total economic output, well above the median for most other low-income nations.
A similar surge in 2008 saw a real-estate boom and bust, the fund warned. …
The National Bank of Cambodia…recently raised the amount of money that banks need to hold in reserve, making it harder for them to access the cash needed to lend.
However, the IMF said that raising the reserve requirement “does not automatically mean tighter credit conditions” and further steps were needed. …
BBC News Staff
http://www.bbc.co.uk/news/business-20954841
Government Bank Gives Loan for Rice Milling
December 14th, 2012, The Cambodia Daily, Agriculture & Agri-business, Agro-Industry, Banking & Finance, Business & Commercial Development, Debt Servicing, Domestic Investment, Economics, News Source, Rice
The government-backed Rural Development Bank has handed a $4.5 million loan to a company planning to invest in Cambodia’s efforts to export more milled rice. Rural Development Bank chairman Son Kuon Thor said yesterday that the bank was giving the loan to a new company called Eng Dypo Development, which is investing a total of $12 million in a rice milling enterprise in Kandal province. “They are going to build a warehouse and dryer and a mill,” Mr. Kuon Thor said. …
Simon Lewis and Phok Dorn, P.21
www.cambodiadaily.com
New services, branches in Cambodia woo bank customers
December 14th, 2012, The Phnom Penh Post, Banking & Finance, Borrowing, Debt Servicing, Financial Services, News Source
Maybank, one of the largest banks in Cambodia, has officially launched an internet banking service to provide a convenient service to its more than 10,000 customers and says it hopes to increase that number by around 10 per cent.
The service, called M2U, will enable customers in Cambodia to access a host of financial services via the internet, such as balance enquiries, fund transfers, cheque status inquiry and loan applications. …
May Kunmakara
http://www.phnompenhpost.com/Business/new-services-branches-woo-bank-customers.html
Prasac inaugurates new HQ in Phnom Penh
December 13th, 2012, The Phnom Penh Post, Banking & Finance, Borrowing, Debt Servicing, Financial Services, News Source
Officials expressed optimism that microfinance institution Prasac would be able to attract more deposit placing clients, after the inauguration of its new headquarters in Phnom Penh’s Boeung Tompun district yesterday.
Representatives from the National Bank of Cambodia and Prasac expect the new 10-storey building to enhance trust in the MFI with depositors and to strengthen the status of the organisation in Cambodia’s financial market. …
Rann Reuy
http://www.phnompenhpost.com/Business/prassacs-new-hq-inaugurated.html
Maruhan Japan Bank buys stake in MFI – Sathapana
November 12th, 2012, CBRE, Banking & Finance, Borrowing, Business & Commercial Development, Debt Servicing, Economics, Financial Services, News Source
Maruhan Japan Bank yesterday became the first commercial bank in Cambodia to make a direct equity investment into a microfinance institution by becoming Sathapana’s majority shareholder, with a 95.1 per cent stake. Financial details were not disclosed.
The shareholders who sold out to Maruhan were FMO, the international development bank of the Netherlands; Developing World Markets, a US-based asset manager specialising in microfinance investment; Tridos, the Netherlands-based global impact investor, Sathapana Employee Investment Limited and founding share holder; Cambodia Community Building NGO, according to a press release. …
CBRE
http://www.cbre.com.kh/2012/11/maruhan-japan-bank-buys-stake-mfi-sathapana/