National Bank: Real Estate Credit Risk Remains Low

• 31 January 2019
• Local News
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Although the real estate sector continues to consume large amounts of credit, risks associated with this high credit growth in the sector remain low, according to a National Bank of Cambodia (NBC) assessment.

The NBC annual report 2018 for financial stability risk assessment released on 30 January 2019, stated that credit in the real estate sector is still healthy despite its strong growth of about 31%.

“[Non-performing loans] in the construction sector at a rate of 4%, property transactions at 1.7%, and home loans of 0.8%, shows that the risk in the sector is still low,” the report said.

However, NBC also noted that, in the context of international experience, the real estate sector comes with high risk due to the changes in the real estate prices, opportunities to exploit, and other events. Within this framework, the size of credit for real estate can pose risks for financial stability if there is not better management in place.

In 2018, total credit in Cambodia increased by 18.8% to 99.1 trillion Riel (about US$24.5 billion). Of the total loan portfolio, construction shared 9.1%, personal home loans 9.8%, and property transactions 7%.

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