The COVID-19 global pandemic continues to cause unprecedented and unpredictable impacts on businesses in Cambodia and the general economy. In response, the Cambodian Government and the National Bank of Cambodia (“NBC”) recently announced measures to relieve the burden on banks, micro-finance institutions (“MFIs”) and affected borrowers. In this alert, DFDL outlines a summary of the financial responses that both the Cambodian Government and the NBC have announced or put into action. These mainly concern providing more liquidity to specialized banks and MFIs and allowing the re-structuring of loans for vulnerable categories of borrowers (e.g. those in the hospitality, garment/textile, tourism and transportation sectors) most likely to be directly affected by the COVID-19 crisis. The actions proposed by the Cambodian Government and the NBC aim to safeguard borrowers by preventing seizure of their collateral and easing the terms and conditions of loans so that may avoid defaulting on their obligations. The NBC’s actions of providing extra liquidity to specialized banks and MFIs are to help them stay afloat and secure their outgoing loans during this time. Guidelines and monitoring mechanisms are also laid out to be followed when restructuring particular loans.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
Contacts
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Co-Head of Cambodia Banking & Finance Practice Group |
Co-Head of Cambodia Banking & Finance Practice Group |
