Small Business Credit Demand Falls in Q2, But Loan Balances Continue to Grow

PHNOM PENH, August 2025 — Cambodia’s small business credit market showed mixed signals in the second quarter of 2025, with a sharp decline in credit applications but continued growth in overall loan balances, according to the latest report from the Credit Bureau Cambodia (CBC).

Small business credit applications fell by 15.7% quarter-on-quarter, driven by steep declines in working capital (-16.3%), agriculture (-9.3%), asset finance (-20.3%), and other categories (-24.5%). Construction was the only sector to buck the trend, recording a 4.4% increase in applications, with the Tonle Sap region leading at +22.1%.

The total amount of credit sought also dropped by 11%, with the largest declines in “Other” applications (-31.6%) and asset finance (-23.5%). Working capital and agriculture applications fell by 21.1% and 18.4%, respectively.

The number of active small business loan accounts declined by 1.2% to 1.79 million nationwide. Working capital loans made up the majority, accounting for 52.6% of all accounts. Agriculture loans followed at 29.6%, while asset finance, construction, and other loans comprised smaller shares.

Despite the drop in account numbers, total outstanding loan balances rose by 0.8% to $35.54 billion. Working capital loans represented 66.3% of the total balance, while agriculture loans accounted for just 10.6%. Regional growth was strongest in the Coastal (+1.8%) and Plain (+1.4%) areas, while Tonle Sap saw a decline of 1.0%.

Loan quality deteriorated slightly, with the share of loans overdue by more than 90 days (90+ DPD) rising to 7.4%, up from 6.9% in Q1. Construction loans had the highest delinquency rate at 11.2%. The largest increases in overdue balances were recorded in Tonle Sap (+9.2%), Plateau (+9.0%), and Coastal (+8.5%).

The report also highlighted borrower behavior: 69.9% of customers maintained credit relationships with a single financial institution, and 55.4% held only one loan account. Just 3.4% of borrowers had more than three accounts.

“The demand for small business credit declined this quarter, both in terms of applications and loan amounts,” said Mr. Oeur Sothearoath, CEO of CBC. “While the number of loan accounts dropped by 1.2%, the total loan balance still grew by 0.8%. However, we observed a slight deterioration in loan quality, with the 90+ DPD ratio rising to 7.4%.”