Bad Loans on the Rise, Central Bank Warns

By Ros Sothea, VOA Khmer

Original report from Phnom Penh

07 September 2009

Cambodia’s banking sector will not be able to avoid further consequences from the global economic downturn, with non-performing loans increasing, the National Bank’s director- told a workshop last week.

“For us, the economic crisis affected garment export, tourism, construction and real estate,” said Director-General Tal Nay Im said at a workshop on the nation’s banking system.

“So the banks’ borrowers are facing a hard time paying back [loans] when they can’t earn from their businesses. That will cause [non-performing loans] to increase, and that’s a second-round affect that the national bank is worried about.”The National Bank reported in June bad loans in 24 commercial banks had risen to 3.7 percent, about $2.4 billion, in 2008, up from 3.4 percent the year before. Click to read more...