Cambodia: From underbanked to overbanked

Private debt explosion highlights need for qualitative growth that’s more sustainable.

In its assessment of Cambodia at the end of last year, the executive board of the International Monetary Fund (IMF) warned that the country was vulnerable to “elevated” levels of private debt.

To rein in private credit growth – projected at 15% this year – the board urged authorities to normalize prudential requirements to pre-Covid settings, boost supervision, and prepare to raise requirements for provisions.

The board also “underscored the importance of implementing corporate insolvency, debt and bank restructuring, and deposit protection frameworks”.

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