Interest rates on loan in riel fall

Interest rates on microfinance loans issued in Khmer riel fell to the same level as those given in US dollar due to recent measures taken by the central banks to promote the local currency and the 18% interest rate cap imposed by the regulator in April this year, according to industry insiders. Hout Ieng Tong, chairman of the Cambodia Microfinance Association (CMA) said that the cap has caused riel loan interest rates to fall as in the past they were set at about 0.5% higher than the US dollar. He also mentioned the liquidity-providing collateralized operations (LPCOs) introduced by the National Bank of Cambodia (NBC) as the tool that helps lender obtain funds in riel at a cheaper cost. Sok Voeun, CEO of LOLC Cambodia, said he was optimistic that more loans would be given in riel as the NBC’s prakas mandating that all lenders hold 10% of their loan portfolio in the local currency comes into effect by the end of 2019. (Source: Phnom Penh Post)