National Bank Eases Measures To Bolster SME Support In Cambodia
By
B2B Cambodia
on
The Royal Government of Cambodia and the National Bank of Cambodia (NBC) have pledged to continue easing certain precautionary measures to provide steadfast support to financial institutions that play a crucial role in fostering the growth of Small and Medium Enterprises (SMEs) in the country.
National Bank of Cambodia. / Image Credit: Khmer Times.
This commitment was reaffirmed by Cambodian Prime Minister Hun Manet during the 19th Government-Private Sector Forum (G-PSF) held at the Peace Palace on November 13, 2023.
Prime Minister Hun Manet underscored the pivotal role of Cambodia's resilient financial sector in driving national economic progress. He acknowledged the challenges posed by rising interest rates, both domestically and globally, as well as escalating global inflation, which have placed significant pressure on banking and microfinance institutions.
Recognising the urgent need for collaborative efforts to sustain business operations in the private sector, the Cambodian government and the NBC have adopted a comprehensive approach that seeks to further ease precautionary provisions. These provisions aim to empower banking and financial institutions to continue supporting joint ventures and enterprises through financing and credit restructuring, particularly in sectors impacted by the economic downturn.
National Bank of Cambodia. / Image Credit: Khmer Times.
This commitment was reaffirmed by Cambodian Prime Minister Hun Manet during the 19th Government-Private Sector Forum (G-PSF) held at the Peace Palace on November 13, 2023.
Prime Minister Hun Manet underscored the pivotal role of Cambodia's resilient financial sector in driving national economic progress. He acknowledged the challenges posed by rising interest rates, both domestically and globally, as well as escalating global inflation, which have placed significant pressure on banking and microfinance institutions.
Recognising the urgent need for collaborative efforts to sustain business operations in the private sector, the Cambodian government and the NBC have adopted a comprehensive approach that seeks to further ease precautionary provisions. These provisions aim to empower banking and financial institutions to continue supporting joint ventures and enterprises through financing and credit restructuring, particularly in sectors impacted by the economic downturn.
Key Policy Measures To Support Financial Institutions In Cambodia
- Extension of Conservation Capital Ratio: The conservation capital ratio will remain at 1.25 per cent until December 31, 2024, allowing banking and financial institutions to maintain adequate capital levels.
- Continuation of Reserve Statutory Rate: The reserve statutory rate will remain at 7 per cent until December 31, 2024, ensuring financial stability and liquidity.
- Restructuring of Tourism Loans in Siem Reap: Banking and financial institutions are now permitted to restructure tourism loans in Siem Reap for clients facing temporary financial difficulties, eliminating the requirement for a 12-month provision.
- Flexible Restructuring of Real Estate Loans: Banking and financial institutions are encouraged to restructure loans in the real estate sector for customers experiencing temporary financial setbacks, subject to strict adherence to the NBC's regulations. Institutions are mandated to conduct a thorough analysis of each client's circumstances and assess the impact on the overall credit system. Additionally, they are encouraged to engage in consultations with the NBC to explore further favourable measures on a case-by-case basis.