The National Bank of Cambodia (NBC) has warned the public against the use of illegal loan services, emphasising the potential for financial losses and significant risks.
In a press conference held on Tuesday, NBC Governor H.E. Dr. Chea Serey highlighted the dangers associated with borrowing from unlicensed lenders, noting that such practices often involve exorbitant interest rates, hidden fees, and deceptive terms and conditions.
These factors can lead to a cycle of debt that is difficult to escape, resulting in substantial financial hardship for borrowers, she said.
‘People should be careful because during this period, there are many people who take the opportunity when they go to borrow from banks, they turn to borrowing from the unregulated borrowers,’ she added.
NBC recommended that individuals only borrow from reputable financial institutions that are licensed and regulated, H.E. Dr. Chea Serey advised.
The NBC’s warning comes in response to a growing concern about the prevalence of illegal lending
activities in Cambodia on social networks – Facebook, Telegram, and TikTok.
NBC advised individuals to carefully review loan contracts and understand all the terms and conditions before signing any agreements.
It also encouraged borrowers to report any suspicious or fraudulent lending activities to the appropriate authorities.
Outstanding loans increased by 2.6 percent year-on-year to US$58.9 billion by June this year, while customers’ deposits rose by 13.4 percent to US$51.9 billion, according to the NBC’s biannual report released in July.
The loans had been given to main sectors such as trade, housing, construction and real estate, agriculture, hotels and restaurants, and manufacturing, among others, it said.
Non-performing loans (NPLs) at the banks and the microfinance institutions were at controllable rates of 6.8 percent and 8.3 percent, respectively, it added.
The report said the current assets in the Kingdom’s banking and financial system rose to US$88.3 billion by June 2024, up 6.1 percent from
June 2023.
Source: Agence Kampuchea Presse