Banks and microfinance institutions should lower interest rates and extend payback periods for low-income Cambodians taking out housing loans, representatives from NGOs, the government and the private sector said on Tuesday at a housing forum in Phnom Penh.
Habitat for Humanity Cambodia organized the National Housing Forum in an effort to aid the government in improving the implementation of its National Housing Policy, a sub-decree passed in 2014 to help lowand middle-income Cambodians buy their own homes.
Habitat Cambodia, a Christian NGO, said more than 180,000 people live in about 500 slums across Phnom Penh and nearly 10 million nationwide—about two-thirds of the population—live in inadequate housing. Inadequate housing may lack electricity, running water or other services.
Land Management Minister Chea Sophara said the government’s housing policy sought to improve infrastructure and social security and provide cleaner water and cheaper electricity.
But Ngin Lyda, a resource development and advocacy specialist at Habitat Cambodia, said the urban poor’s needs were a long way from being met. She specifically cited high lending rates and standards.
“Interest rates are too high and the duration [for repayment] is too short,” she said. Low-income families are often not approved for loans because they lack collateral, she added.
Yuk Sothirith, general manager at construction company Worldbridge Homes, which has built low-income housing complexes in Phnom Penh, agreed that banks needed to do more.
“Developers alone cannot address” the issue, he said. “We need collaboration from the banking sector.”
Tep Makathy, director of the Cambodian Institute for Urban Studies, an urban planning research group, said the government also needed to play a bigger part. “We need a facilitator—no one is better to do this than the government,” he said.
Reached by telephone after the event, Beng Hong Socheat Khmero, director-general of the Land Ministry’s general department of housing and a keynote speaker at the event, said the government supported lowering interest rates.
However, he added, banks “need to do business, too.”
National Bank of Cambodia director Chea Serey could not be reached for comment.