An accurate and reliable source of credit data is tantamount to the financial stability and development of any country. When investors have access to trustworthy credit data they feel more confident in their investments; it follows that the amount of foreign and domestic capital invested into the country increases when such information is readily available. This is why the Credit Bureau of Cambodia, the country’s leading provider of credit reporting services to organisations and consumers, plays such an important role in the Kingdom’s economy.
The CBC, an agency regulated by the National Bank of Cambodia (NBC), provides financial information, analytical tools and credit reports to banks, microfinance institutions, leasing companies, credit operators and consumers.
To assess the relevance and role of this credit reporting agency in the Cambodian economy, the B2B team of writers has a one-on-one with the CEO of the agency, Pascal Ly, and talks to some high-profile users.
A valuable tool for lender and borrowers
For both the bank and the loan-taker, the CBC plays a critical role in facilitating the lending process. To the lending institution, the benefits derived from the work of the CBC are manifold. The credit reports put together by the CBC help banks manage risks and speed up their due diligence process, making it easy to determine the loan habits of the borrower and their creditworthiness. As mandated by the NBC, each loan request made in Cambodia must be checked against a credit report from the CBC.
“Financial institutions do rely on the credit information of our reports to make decisions. However, the CBC does not indicate in any of its reports whether or not a loan should be approved. We are one component in the entire decision-making process, but the final decision lies with the institution,” explains Ly.
Dr. In Channy, president of ACLEDA Bank, is familiar with the work of the CBC. He explains that the bureau “plays an important role securing funding in Cambodia by sharing credit information with stakeholders and evaluating the creditworthiness of loan customers.” For Dr. Channy, the work of the CBC helps prevent over-indebtedness, speeds up the loan process, and facilitates customer access to financial resources.
“Through its Industry Performance Monitoring Report, the CBC helps banks analyze its own performance vis-à-vis other banks, MFIs, and the overall market. The bank can then set its own credit strategy. The information provided by the CBC allows banks access to new corporate loans. Finally, due to the work of the CBC, the operational costs and time spent for loan evaluation are significantly lower than before,” Dr. Channy explains.
To the consumer, the CBC is also a valuable tool: “The CBC can freely provide, once a year, their individual credit report. This allows consumers to check their credit information. The CBC is readily available to explain in detail the meaning of the information contained in the report,” asserts Ly.
Besides helping banking institutions and loan-takers speed up and secure the borrowing process, the CBC can also provide valuable services to businesses. Through the provision of commercial credit insight, the CBC helps companies reduce costs and risks associated with their credit portfolio.
Their real time data reports help companies segment their loans and credit portfolio, while their notification services allow customers to track, analyze and take prompt action to reduce write-offs and identify additional revenue opportunities.
The CBC has garnered the support and trust of leaders in the banking sectors and of consumers. According to Ly, since the inception of the organisation, the satisfaction rate of consumers who have resorted to CBC’s reports borders 100 percent. Their work is essential in fostering an understanding of the market, and in promoting economic stability and development. In the words of Matthew Tippetts, managing partner at M Invest, “the CBC increasingly plays an integral role in facilitating safe credit decisions, thereby making the market safer.”