The number of credit inquiries and credit report requests surged in the first 12 months of the Credit Bureau of Cambodia’s (CBC) existence, the bureau’s CEO said on Thursday.
Marking the first anniversary of the CBC, Garry Wood, CEO of the bureau, said that the number of credit inquiries run over the past 12 months has increased from 6,000 a month in 2012 to 158,000 a month in February 2013.
Mr. Wood said that credit report requests from banks had also risen from about 6,000 per month last year to 30,000 a month by the end of February this year, indicating that more and more people are seeking credit or loans around the country, and that the banks are keen to assess the suitability of potential clients.
“Cambodia certainly has volume in its [microfinance institution] sector—in the past 12 months, the Credit Bureau has generated 1.3 million credit reports,” Mr. Wood told the audience of several hundred people from the finance sector who attended Thursday’s event.
The CBC is the country’s first credit reporting system.
When it was established last March, it became mandatory for all banks and MFIs to upload borrower information to its central system. A failure to do so could result in fines.
The CBC is an affiliate of the Association of Banks in Cambodia, the Cambodian Microfinance Association and New Zealand information technology company Veda Advantage, which in 2011 won the bid to provide a credit-checking system for the CBC.
Neav Chanthana, deputy governor of the National Bank of Cambodia, said it is vital to closely monitor credit risk, particularly as the economy continues to grow.
“Credit risk must be carefully monitored and regulated in any economy, but particularly in fast growing economies such as ours, where the expansion of credit has the potential to outstrip the GDP growth,” Ms. Chanthana said.
“The presence of such credit risk may have serious impacts, including a potential slowing down of the banking and financial sector, and later the general economy if it were to go unmanaged,” she said.