[PHNOM PENH POST]
Cambodia's banks should be largely spared the heavy damages already seen
in many parts of the Kingdom’s economy, officials said yesterday,
though microfinance lenders will feel some impact.
Minister of
Economy and Finance Keat Chhon last week revised downward the
government’s gross domestic products for 2011 as a result of the floods,
to 6 per cent from an earlier 7 per cent. While there was potential for
that constriction to also affect the banks, which loan to most sectors
of the economy, officials tempered the concern.
The agriculture
sector by far has seen the most significant impact from the floods, with
about 318,900 hectares of rice, or 13 per cent of the country’s total
crop, having been affected, according to National Committee for Disaster
Management figures released last week.
However, that sector
represents a small portion of banks’ overall loan portfolio, National
Bank of Cambodia director general and spokeswoman Ngoun Sokha said
yesterday. Banks lend significant sums to industry, trade and services
companies, but she said only 10 per cent of total loans go to
agriculture firms.
“Our financial industry will not be impacted,” she said, adding bank operations would continue “normally.”
Agriculture
accounts for 15 per cent of ALCEDA Bank’s loan portfolio, according to
president and CEO In Channy, and therefore should have little effect on
the bank as a whole.
He said ACLEDA specifically spreads its loan
risk in anticipation of flood season, in addition to its typical loan
diversification, “to avoid accidental risk.”
“We know the floods
happen every year, and we know what areas it will impact. So we
diversify our loans to other sectors,” he said, acknowledging the
seasonality of agriculture loans.
A number of domestic banks
echoed In Channy’s sentiments, however, the largely agriculture-focused
microfinance industry did voice some concern.
Cambodian
Microfinance Association chairman Chea Phalarin said he didn’t yet have
exact figures on the flood’s effect on MFIs, he did note the industry’s
vulnerability. Still, he reckoned most MFIs – and their clients – would
be able to survive the season.
“We won’t get too much impact, just a little,” he said. “I think our performance in the fourth quarter will also be okay.”
NBC’s
Ngoun Sokha agreed with Chea Phalarin, given the industry’s exposure to
agriculture. And again, she pointed to MFIs as being a small piece of a
much larger industry, therefore their effect was minimal.
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