Khmer Times News: Cambodia’s retail credit market continued to expand during the third quarter of 2025, with the total retail loan balance rising to $16.17 billion by the end of September, according to the latest Retail Credit Index released by the Credit Bureau Cambodia (CBC).

This represented a 1.22 percent increase quarter-on-quarter, ​​​reflecting continued demand for ​​​​​​​​consumer borrowing across the country. The total number of retail loan accounts reached around 2.32 million, marking a 5.76 percent increase compared to the previous quarter.

The CBC noted that account growth was visible across all major loan categories, with personal finance loan accounts increasing by 5.0 percent, credit card accounts by 6.1 percent, and mortgage loan accounts by 4.8 percent during the quarter.

The expansion in the overall loan balance was led primarily by personal finance loans, which increased by 3.7 percent, and mortgage loans, which rose by 3.4 percent, while credit card loan balances posted a more modest increase of 0.8 percent.

The growth occurred across regions, including the Plateau, Plain, Tonle Sap and Coastal areas, indicating wider participation in consumer lending beyond the main economic centres.

However, the report also pointed to the need for continued monitoring of debt servicing. Loans more than 90 days past due accounted for 6.40 percent of personal finance loans, 4.87 percent of credit card balances and 9.10 percent of mortgage loans.

CBC also reported that 71.01 percent of borrowers held loans with a single financial institution, while 28.99 percent maintained loan relationships with multiple lenders, a segment that remains under careful supervision to manage repayment risks.

CBC stated that comprehensive and timely credit reporting continues to support responsible lending decisions and contributes to the stability of the financial sector. Lending institutions are expected to maintain credit discipline while responding to the evolving needs of households and businesses as domestic economic activity progresses.

It is worth noting that in the second quarter of 2025, Cambodia’s retail credit market also continued to expand with the total outstanding loan balance climbing to $15.97 billion by the end of June, the CBC report added.

The number of active retail loan accounts grew by 3.59 percent from the previous quarter, reaching approximately 2.19 million accounts nationwide. The increase was seen across all major regions of the Kingdom, reflecting continued borrowing activity despite slower credit demand.

Retail credit applications, which indicate consumer intent to seek new loans such as personal finance, credit cards, or mortgages, fell by 3 percent in the second quarter. Personal finance applications declined by 2 percent, credit card applications by 8 percent, and mortgage applications by 20 percent, with the steepest declines seen in the Plateau and Coastal regions.

Despite the drop in new applications, retail loan performance remained positive. Personal finance loans accounted for the vast majority of accounts at 82.42 percent, yet mortgage loans represented the largest share of outstanding loan balance at 50.19 percent, reflecting higher borrowing values for housing.

However, loan quality softened during the quarter. The ratio of loans overdue by more than 90 days (90+ DPD) increased to 5.41 percent, compared to 5.06 percent in the first quarter of 2025.

Credit card loans recorded the highest delinquency rate at 8.74 percent. CBC noted that 90+ DPD balances rose across all regions, led by the Plateau and Tonle Sap regions.

CBC CEO Oeur Sothearoath said the quarter reflected mixed trends. “The demand for retail credit decreased in terms of applications, while retail credit performance remained positive in both the number of loan accounts and outstanding loan balance,” he said, adding that the rise in overdue loans highlights a need for strengthened financial discipline among borrowers.

Meanwhile, credit growth in Cambodia’s banking sector has continued to ease this year as businesses and households adopt a more cautious borrowing approach amid softer revenue conditions and rising non-performing loans (NPLs), according to the Association of Banks in Cambodia (ABC).

Sok Chan, spokesperson for the ABC, told Khmer Times that credit growth has slowed to around 2.9 percent as of mid-2025, compared to stronger expansion in recent years. He noted that many small and medium enterprises (SMEs) and individual borrowers are choosing to delay investment or expansion plans due to reduced business income and concerns over loan repayment risks.

“Currently, household incomes and business revenues have declined, leading many SMEs and business owners to be cautious or postpone their expansion plans,” he said. “At the same time, non-performing loans continue to rise, making borrowers more hesitant to take new loans, which explains the slowdown in loan growth.”

However, the banking sector remains stable and liquid, supported by continued deposit growth and strong regulatory oversight. Deposits within the banking system have continued to expand, reflecting ongoing public trust and confidence in the financial system.

“The deposit growth reflects continued confidence of the public and business community. Increased digital adoption and simplified transaction processes have made it easier for people to deposit and manage their funds through digital banking channels,” Chan said.

He added that Cambodia’s peace, political stability, steady economic growth, low inflation and stable exchange rate continue to underpin the resilience of the banking sector and maintain investor confidence. Strengthening regulatory and risk management frameworks, capital adequacy requirements, and consumer protection policies have also contributed to sector stability.

Chan highlighted that banks continue to comply with regulations issued by the National Bank of Cambodia (NBC), including the Early Supervisory Intervention framework to ensure adequate liquidity and strong capital reserves. The NBC has also reduced the Capital Conservation Buffer to 1.25 percent and the Reserve Requirement to 7 percent, helping banks maintain liquidity to support market demand.

The ABC and NBC continue to implement the Loan Restructuring Mechanism to manage rising NPLs and support affected borrowers, he added. While credit growth is currently subdued, the ABC expects lending activity to gradually improve once business revenues recover and confidence strengthens.