Has the Pandemic Spared Cambodia? Liquidity Considerations of Cambodia's Large MFIs

Anecdotal evidence on COVID-19 and its impact on life in Cambodia suggests that the impact on the country has been limited. The ravages of the pandemic on the microfinance sector in Asia resulting in low recovery rates of loans and liquidity challenges for inclusive financial service providers may not, therefore, impact Cambodian microfinance substantially.

The analysis in this note indicates that, in the absence of a sharp turn for the worse, Cambodian microfinance is in a relatively comfortable position compared to other Asian microfinance sectors. Whether the effect of large loan size and potentially extensive business failure and/or loan restructuring in the medium term will come back to bite the sector 12-18 months from now remains to be seen.