NEW: Central bank to set interest rate ceiling, 1 April 2017
Posted: Tue Mar 14, 2017 10:39 am
Central Bank Sets Interest Rate Ceiling, Sparking Fears
| March 14, 2017 |
The National Bank of Cambodia announced on Monday that it would set an annual interest rate ceiling of 18 percent for all microfinance institutions (MFIs), sparking concerns that lenders would stop offering smaller loans that often keep the most financially vulnerable afloat.
The measure, set to come into effect on April 1, contradicts conclusions drawn by a National Bank researcher in a report released last year that advises against establishing interest rate ceilings, citing harmful effects on small-scale borrowers.
With the average annual rate on high-risk, small loans currently running from 20 to 30 percent, the new ceiling will “prevent heavy indebtedness and reduce poverty, prevent clients from being charged too high interest rates by microfinance institutions and encourage the effective use of loans,” the bank bank announced in a statement on Monday.
A second statement released by the central bank said the new rules would only apply to new or restructured loans. Central bank officials could not be reached for comment...
https://www.cambodiadaily.com/news/cent ... rs-126483/
| March 14, 2017 |
The National Bank of Cambodia announced on Monday that it would set an annual interest rate ceiling of 18 percent for all microfinance institutions (MFIs), sparking concerns that lenders would stop offering smaller loans that often keep the most financially vulnerable afloat.
The measure, set to come into effect on April 1, contradicts conclusions drawn by a National Bank researcher in a report released last year that advises against establishing interest rate ceilings, citing harmful effects on small-scale borrowers.
With the average annual rate on high-risk, small loans currently running from 20 to 30 percent, the new ceiling will “prevent heavy indebtedness and reduce poverty, prevent clients from being charged too high interest rates by microfinance institutions and encourage the effective use of loans,” the bank bank announced in a statement on Monday.
A second statement released by the central bank said the new rules would only apply to new or restructured loans. Central bank officials could not be reached for comment...
https://www.cambodiadaily.com/news/cent ... rs-126483/