Loans interests update: the National Bank of Cambodia's announced on the 3rd of March 2017 their decision to cut down interest rates of loans of all the banks and micro finance institutions (MFI) in Cambodia to 18% per year.
Having set the interest rates to a low 18 percent a year or simply 1.5 percent a month, this contributes to the support of the Cambodian Royal Government policy regarding the protection of the interests of citizens, especially the underprivileged. It also helps prevent excessive debt of citizens, reducing poverty, protect customers from high interest rates for loans from any micro finance institution, and also to promote loan operation effectiveness and security through loan provisions from MFI.
Previously, the interest rate was not explicit, and some MFIs set high loan interest rates of up to 3% a month or 36% a year, which has buried many people in debt.
This announcement is a good sign of resolution to reducing the debt of the citizens. And it will also be advantageous for startups, small businesses, and all economic activities involved in the country.
This announcement will be implemented effective 1st of April 2017 and marked as mandatory.
A senior official of the National Bank of Cambodia clarifies that this announcement only applies for new customers. Existing customers will still make use of the old interest rate policy.