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. …
Private car owners could soon be required to buy motor insurance if a planned law amendment gets the green light, stoking optimism that such a bill could put the brakes on Cambodia’s high rate of hit-and-run accidents.
Currently, only commercial vehicles, such as buses, legally require motor insurance. However, the Ministry of Economy and Finance – which oversees the insurance industry – has proposed that private car owners be forced to take out third-party liability insurance, which covers damages in an accident caused by the insured. …
The proposed amendment excludes motorbike owners because “they may not have enough money”, he said. The IAC also has to discuss premiums with the Ministry of Economy and Finance, although costs would, “of course, be cheaper” than current rates for commercial vehicles, to keep the proposed insurance affordable, he said. …
The new 100,000 riel banknote depicting the late King Father Norodom Sihanouk is not just a pretty historical token. It will also help inject much needed cash into the economy, according to the National Bank of Cambodia.
Although take-up will occur as older banknotes of other denominations deteriorate, the introduction of the new denomination will provide additional liquidity that is demanded by Cambodia’s rapid growth, NBC director-general Nguon Sokha said. …
Kang Chandararot, president of the Cambodian Institute for Development Study, is concerned that now is not the right time for increasing the liquidity volume in Cambodia. A strengthening dollar, “seasonal riel demand”, a lack of long-term growth and inflationary pressures from the Kingdom’s neighbours are all reasons increasing liquidity was “dangerous”, he said. …
Japanese Bank of Tokyo-Mitsubishi UFJ (BTMU) signed an agreement yesterday with local Canadia Bank to shore up Japanese growth in Cambodia and to demonstrate its confidence in the Kingdom’s financial sector.
BTMU’s managing executive officer, Takami Onodera, and Pung Kheav Se, chairman of Canadia Bank, yesterday signed the agreement with the intention of bringing more Japanese investors to Cambodia. …
Japanese investment totalled about $330 million last year, a big jump from about $75 million in 2011.
Furthermore, data from the Japanese Business Association of Cambodia show that there were 101 Japanese companies here at the end of 2012, an increase from 69 the year before. …
The National Assembly yesterday passed a law to amend three articles in the anti-money laundering and terrorism financing law by a vote of 83 to six.
Speaking at the start of session, Chea Chanto, governor of the National Bank of Cambodia, said the amendments would give the law more teeth by raising sentences and fines.
Last year, Cambodia was ranked the third most-susceptible country (out of 144) to money-laundering by the Switzerland-based Basel Institute on Governance. Chief among its reasons was insufficient regulation and rampant corruption. …
“I would like to raise … that in Cambodia there is presently about $1 billion in dirty money coming from corruption and illegal actions of powerful men and some dishonest companies,” he [Cambodia National Rescue Party lawmaker Yim Sovann] said. “We have the laws, but the measures taken to fight corruption are still weak, and this law might not really be effective.” …
Cambodia will launch a new 100,000-riel banknote (in equivalent to 25 U.S. dollars) in order to celebrate the sixtieth birthday of King Norodom Sihamoni on May 14, a central bank official said Wednesday. …
A sub-decree on the issuance of the new 100,000-riel banknote was signed by Prime Minister Hun Sen on April 30. The 100,000-riel bill is the country’s highest riel value banknote. …
A new microfinance institution (MFI), ORO Financecorp Plc, is set to open in Cambodia, according to the director-general of the National Bank of Cambodia (NBC). …
Cambodia already has 35 registered MFIs, according to a recent report by the Cambodia Microfinance Association (CMA). …
Last week, the Post reported that the loan portfolios of the 35 registered MFIs and four NGOs that are members of the CMA reached $1 billion at the end of March, a 41 per cent increase from the same time last year. …
Cambodia is considering offering sovereign bonds to raise more revenue for the national budget and move away from its dependence on overseas aid, a senior central bank official said Sunday.
National Bank of Cambodia director-general Nguon Sokha said the Ministry of Economy and Finance was currently looking at other countries’ experiences with bond markets and was seeking outside help to issue the government’s first bonds.
By issuing sovereign bonds governments can raise money from international investors that are usually paid back with interest at the end of a fixed term. …
Ms. Sokha said there was no set date for when the bonds might be issued, but officials were working on the plan with help from the Asian Development Bank (ADB) and members of the Asean+3 group, which includes China, Japan and South Korea. …
Cambodia is set to graduate this year or next to a lower middle-income country but still qualifies for overseas development assistance and concessional loans from international institutions.
“For long term financing, we cannot really survive on development assistance,” Ms. Sokha said. …
Although Cambodia does not currently issue sovereign bonds, it has been assessed recently by credit rating agencies. The most recent assessment by Moody’s gave the country a stable but high-risk “B2” rating, which means Cambodia is deemed to have “very low economic resiliency.”
The World Bank has warned that the rapid growth of lending by Cambodia’s Banks is still a concern, despite a recent slow-down in credit disbursals.
“Credit growth, which has been driven largely by wholesale and retail financing, and starting in 2011 agriculture financing, has eased to 29.2 percent (year on year) in January 2013,” the bank said in an economic update sent out on Friday.
The annualized rate of lending growth was 34 percent in December and as high as 34.6 percent in January 2012, the bank said.
The high rate of growth had raised concerns of overheating from international financial institutions, and led the National Bank of Cambodia to raise the reserve requirement imposed on Banks from 12 to 12.5 percent in September. …
[The World Bank] also noted that Cambodia’s trade deficit in 2012 was 11.5 percent, up from 8.7 percent in 2001, due to rising fuel imports and construction materials being brought in for large hydropower projects.
However, this was cancelled out by a jump in foreign direct investment, which reached $1.5 billion last year.
Cambodia’s banking industry recorded a slight increase in lending in the first two months of this year after a sharp rise last year, according to a consolidated data provided by the National Bank of Cambodia (NBC) on Saturday.
The data showed that the kingdom’s 33 commercial banks had lent a total of 5.99 billion U.S. dollars to customers by the end of February this year, up 1.7 percent from 5.89 billion U.S. dollars at the end of December last year, the report said.
It added that 32 percent of the loans went to wholesale and retail trade, 10 percent to agriculture, 9 percent to manufacturing, 8 percent to construction, 6 percent to hotels and restaurants, 6 percent to mortgages and the remaining percentage went to financial institutions, real estate and personal borrowing. …
By the end of February this year, the NBC said that the banks received 6.25 billion U.S. dollars, up 1 percent from 6.19 billion U.S. dollars at the end of last year.
Cambodia has the population of about 14.5 million. Its banking sector has been serving about 1.6 million borrowers and 1.9 million depositors, according to the NBC.
Group Lease has decided to raise the capital of its wholly owned Singaporean subsidiary Group Lease Holdings to serve as the main funding source for its Cambodian motorcycle leasing operations after six months of satisfactory trial operations there. …
Cambodia, which is managed by Group Lease’s wholly owned subsidiary GL Finance, will increase its accounts to 1,000 next month and 2,000 next quarter as planned. …
To ensure that the financial resources for the Cambodian operations are adequate and to comply with the National Bank of Cambodia’s regulations on capital sufficiency, the registered capital of the Singapore unit will be raised from 3 million Singapore dollars (Bt69.75 million) to S$4.6 million, while paid-up capital will increase from S$757.500 to the full S$4.6 million, according to a filing to the Stock Exchange of Thailand. …
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. …
Having seen rapid growth since launching in Cambodia two years ago, the Bank of China (BoC) plans to expand its business operations here.
According to a Xinhua report, BoC’s deputy governor Zhu Shuming said during his visit to Cambodia last Friday that its local operations have started to make a profit. “The bank’s progress shows that Cambodia’s banking sector still has much room to grow.” …
The Bank of China is going to expand its business operations in Cambodia after it was launched here two years ago and seen rapid business growth, Zhu Shuming, visiting deputy governor of Bank of China, said Friday.
Speaking at a meeting with Chea Chanto, governor of the National Bank of Cambodia (NBC), Zhu thanked the NBC for supporting the presence of Bank of China-Phnom Penh Branch, saying that the bank has seen rapid business growth since it was officially launched here in May 2011 and opened its first sub- branch in December last year. …
Currently, Cambodia has 33 commercial banks, serving about 1.6 million borrowers and 1.9 million depositors, according to the NBC. …
The Council of Ministers on Friday approved a draft law amending three articles in the law on anti-money laundering and the financing of terrorism in order to make Cambodia more investment-friendly. …
Last month, the National Bank of Cambodia’s Financial Intelligence Unit (FIU), law enforcement officials and private banks held a weeklong training program, supported by the British Embassy, aimed at arming Cambodian authorities with the knowledge needed to stop the exploitation of the country’s light regulations on financial crime. …
Prime Minister Hun Sen will travel to China on Saturday to meet with the rising superpower’s new leadership, in a trip the government expects to yield nearly $2 billion in loans and aid.
Most significantly, the Government is hoping to secure Chinese funding for a 1.67 billion oil refinery project in Kampot province, which would ensure China’s prime position in Cambodia’s yet-to-take-off oil industry. …
The statement [from the Ministry of Foreign Affairs and International Cooperation] lists eight deals including a memorandum of understanding between the National Bank of Cambodia and China Banking Regulatory Commission, an “agreement on economic and technical cooperation” worth 48.38 million, more than $73 million in concessional loans for an irrigation project in Kompong Thom province and a bridge in Kandal province.
According to the statement, the government also expects to sign a memorandum of understanding on a 5-million-ton-a-year oil refinery project, involving China Development Bank and China Export and Credit Insurance Corporation, both Chinese state-owned companies, to the tune of $1.67 billion.
China’s development bank is known as one of China’s “policy banks”- meaning that it gives loans in support of Chinese foreign policy. Such banks have funded Chinese-built hydropower dams in Cambodia.
In December, China Perfect Machinery Industry Corp.- which is majority owned by state-owned industrial giant SINOMACH- and Cambodian Petrochemical Company- which is chaired by cigarette magnate Kong Triv- agreed that work would begin on the oil refinery this year. …
Two Chinese companies, China National Offshore Oil Corporation and China Petrotech Holdings ltd., have been grated exploration blocks off Cambodia’s coat to search for oil and gas. …
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. …
Taiwan Cooperative Bank, one of the leading banks in China’s Taiwan, officially commenced business in capital Phnom Penh on Thursday, bringing the number of commercial banks in the kingdom to 33.
Taiwan Cooperative Bank is the 2nd bank from China’s Taiwan in Cambodia after the Mega International Commercial Bank opened its door in September 2011. …
Cambodia sees fast growing in banking sector in recent years. As of last year, the kingdom’s commercial banks had lent a total of 5.89 billion US dollars to customers, a 34 percent rise year- on-year, according to the report of the National Bank of Cambodia.
On the deposit side, the customers’ deposits at the banks had amounted to 6.19 billion US dollars by last year, up 25 percent year-on-year, it said. …
With Cambodia currently seen as a country where the laundering of illicit cash may be going undetected, an international expert yesterday warned that economic growth and more international trade could leave the country open to financial crime. …
Gert Demmink, a former head of supervision at the Netherlands’ central bank and a consultant on financial crime for GovRisk, said … money launders “seek out new economies where they can safely hide their money, conceal their money… make sure they will not lose due to high levels of corruption and make sure they can utilize the formal financial [system],” Mr. Demmink said…
With economic growth in Cambodia having reached more than 7 percent over the past years and the value of the country’s import and exports rising fast, the risk of money laundering will increase, he said. …
The U.S State Department’s Annual International Narcotics Control Strategy Report, published on March 1, in its section on financial crime in Cambodia, says the country had “significant money laundering vulnerability,” cash-based dollarized economy, informal financial systems porous borders and limited regulation. …
Cambodia’s largest commercial bank, Acleda, plans to install 30 automatic teller machines (ATMs) this year as the bank expects about a million new depositors during the coming year.
Acleda president and chief executive In Channy told the Post yesterday additional ATMs would be installed in Phnom Penh, in several provinces and in district-level offices in response to the increase in clients. …
