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In a rapidly changing Cambodian economic landscape, a paradoxical dynamic is emerging: while the banking sector only manages to grow by 3% in the granting of credits in 2024, reaching $59.9 billion, deposits banks are experiencing a real surge, increasing by 16.3% to reach 57 billion dollars. This phenomenon raises intriguing questions about Cambodians’ confidence in their financial system, despite demand for credit that appears to be stalling. What is behind this situation?
In 2024, the Cambodian banking system offers us a fascinating spectacle. On the one hand, bank loans stagnated with a modest increase of 3%, reaching $59.9 billion. On the other hand, deposits are experiencing a real surge, climbing 16.3% to stand at $57 billion. This phenomenon calls into question and raises questions about the underlying dynamics of public confidence in the financial system.
Credit at half mast: a significant slowdown
The bank credit landscape in Cambodia in 2024 is darkening, with growth limited to a meager 3% increase. With total outstanding loans amounting to $59.9 billion, this stagnation raises questions among economists and investors. According to analyzes by the National Bank of Cambodia (NBC), this trend could reflect a more uncertain economic context overall.
Growing confidence: the explosion of deposits
In contrast to the weak dynamism of credit, bank deposits are booming. Indeed, they jumped 16.3%, reaching an impressive total of $57 billion. This surge in deposits reflects renewed faith among Cambodians in their banking system. H.E. Dr. Chea Serey, Governor of the NBC, emphasizes that this phenomenon is a strong indicator of confidence despite the uncertainties weighing on various sectors.
The causes of the credit slowdown
The reasons behind this tarnished face of credit are multiple:
- Less demand : After a period of unbridled growth, sectors such as construction, real estate and tourism are showing signs of weakness. Companies and individuals, cautious, therefore borrow less.
- More caution from banks : In an uncertain global environment, banks are adopting a more selective approach to lending, thereby reducing their exposure to risk.
Subprime loans on the rise
Another point of concern is the rise in defaulted loans, reported by NBC. The latter reach 7.9% in banks and rise to 9% in microfinance institutions. This striking figure highlights the need for increased oversight and captures the attention of regulators, already alarmed by the underperforming credit market.
A banking sector still strong
Despite these apparent challenges, Cambodia’s banking sector remains surprisingly robust. Bank assets grew by around 7% in one year, reaching $91.1 billion. This state of affairs argues in favor of a financial system capable of supporting, despite everything, the country’s economic recovery and maintaining the confidence of depositors.
A growing financial landscape
Cambodia is today positioned as a dynamic banking hub in Southeast Asia. With 59 commercial banks, 9 specialized banks, 85 microfinance institutions and 114 rural credit institutions, the sector is booming. Users are not left out, with 23.3 million deposit accounts recorded, compared to 4 million credit accounts. These statistics clearly illustrate the dynamism and potential of a sector that seeks to navigate between prudence and innovation.
To learn more about the challenges and opportunities of the Cambodian banking sector, discover This item which delves deeper into the question of economic growth in 2024. Additional analyzes on agriculture and development in this country can be found here. For more insights into credit dynamics, see this link.
Finally, for an overview of private debt in Cambodia, another interesting article is available here.
FAQs about credit and bank deposits in Cambodia
What is the growth rate of bank loans in Cambodia in 2024? In 2024, bank loans only recorded an increase of 3%, reaching a total of $59.9 billion.
How are bank deposits evolving in the country? Deposits saw a significant increase of 16.3%, to achieve $57 billion, reflecting Cambodians’ confidence in their banking system.
What are the reasons for the credit slowdown? This slowdown can be attributed to two main factors: decrease in demand in certain sectors and increased precaution on the part of banks.
Which sectors are affected by this reduction in demand? Sectors like construction, L’real estate, THE tourism and the trade are still experiencing difficulties, which is leading to a decline in borrowing.
How are banks reacting to the global economic situation? Banks have become more selective in granting credit, adopting a more cautious approach in the face of an uncertain economic context.
Are defaulted loans increasing? Yes, according to the National Bank of Cambodia report, defaulted loans are on the rise, reaching 7.9% in banks and 9% in microfinance institutions.
What is the general state of the banking sector despite these challenges? The financial sector remains robust, with banking assets increasing by 7%, totaling $91.1 billion, which indicates support for the economic recovery.
How many financial institutions exist in Cambodia? Cambodia is home to 59 commercial banks, 9 specialized banks, 85 microfinance institutions And 114 rural credit institutions.
How many deposit and credit accounts are listed? The country matters 23.3 million deposit accounts against 4 million credit accounts, indicating a financial landscape in full swing boom.