Cambodia’s growing Home Loan problem

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Cambodia’s growing Home Loan problem

Post by CEOCambodiaNews » Sun Jan 19, 2020 11:27 am

January 18, 2020
Cambodia’s growing Home Loan problem
Calls for more controls on developers also acting as loan arrangers

Real estate industry insiders want the central bank and the Ministry of Economy and Finance to set up policies and strengthen the law on residential project developers who act as financial institutions to provide housing loans to the customers without assessing their ability to repay them.

They say that because competition is tough in the real estate market in the Kingdom and the market is limited, some developers allow potential buyers to make installment payments on properties, especially houses, directly with the developers without asking for a down payment.

They are also offering discounts to attract customers to purchase their projects.

The fear is these strategies could hurt customers who lack financial literacy and don’t understand the obligations of repayment or the consequences of failing to meet them.

In some cases homes are repossessed and buyers lose a lot of money.

Po Eav Kong, chief executive officer (CEO) of Advance Real Estate, says that when people buy a house in a borey residential project by paying in installment to the developers, the interest rate can be higher compared with what banks and microfinance institutions offer.

He adds that the interest rate with Borey developers is from 10 percent to 20 percent per annum. However, if the customers get a home loan from a bank, the interest rate can be between 6 to 8 percent or, in some circumstances, 10 percent at most.
Full article: https://www.khmertimeskh.com/50680977/p ... home-front
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fazur
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Re: Cambodia’s growing Home Loan problem

Post by fazur » Sun Jan 19, 2020 11:41 am

CEOCambodiaNews wrote:
Sun Jan 19, 2020 11:27 am
The fear is these strategies could hurt customers who lack financial literacy and don’t understand the obligations of repayment or the consequences of failing to meet them.
Yet, it goes on. Why? Greed.
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