All MFIs To Drop Annual Loan Interest Rate to 18% from April

The Royal Government of Cambodia (RGC), through the National Bank of Cambodia (NBC), has ordered all microfinance institutions (MFIs) across the nation to decrease their loan interest rate from over 30 percent to only 18 percent per year or 1.5 percent per month.

According to a press release of the NBC made public yesterday, the move is aimed to contribute to protecting the people, especially the poor, from MFIs' high interest rate and to promoting effective loan use.

The new loan interest rate of at most 18 percent a year will come into effect from April 1, said the same source.

In another Prakas issued on the same day, NBC underlined that the new rate will apply only to new loans, restructured loans and refinancing.

According to the Cambodia Microfinance Association (CMA), a total of 50 MFIs have been registered as CMA's members. Among them, 8 are licensed deposit taking institutions.

Source: Agency Kampuchea Press