dkhmernews

Mrs. Tal Nai Im, director general of the National Bank of Cambodia (NBC), expressed worries that, if the world financial crisis persists, its secondary effect will have a negative impact on the Cambodian bank sector. During the recent period of financial crisis, Cambodian banks were not directly affected.

Impact of the worldwide financial crisis on the banking sector in Cambodia and future prediction were two topics of discussion raised by Mrs. Tal Nai Im, NBC director general, during a roundtable discussion organized by the Club of Cambodian Journalists. Tal Nai Im indicated that the secondary effect of the financial crisis could have a negative impact on the banking sector in Cambodia because of the increasing amount of stagnant loans, i.e. bank loan borrowers during the financial crisis period do not have the ability to pay back their loans to the bank because of the stagnation of their businesses, and the loans borrowed to build houses or buy lands could not be returned to the banks either. Tal Nai Im added that the stagnant loan funds increased from 3.7% in December 2008 to 5.2% in May 2009.

Currently, Cambodia has 35 banks and 45 financial institutions that are under the supervision and review of the NBC. There are currently 820,284 bank loan borrowers, i.e. 6% of the 14 million population of Cambodia. The amount of bank deposits is $2.9 billion, and the amount of loans is $2.4 billion.

At the explosion of the financial crisis at the end of 2008, Cambodian banks were not seriously affected. However, Tal Nai Im indicated that the worldwide financial crisis caused a drop in garment export, tourism, construction, as well a drop in real estate prices in Cambodia.