In a significant development for financial services in Cambodia, leading banks such as ABA Bank, ACLEDA Bank, and the newly joined Wing Bank, are now providing instant loan facilities against fixed deposits. This innovative financial product allows customers to secure loans swiftly without having to liquidate their term deposits, preserving their interest earnings.
ABA Bank has been at the forefront of this initiative, offering loans ranging from $50 to $50,000, or 200,000 to 200 million riels, against customers’ fixed deposits. Remarkably, the loan amount can be up to 90% of the value of the fixed deposit. ABA Bank has streamlined this process through its mobile application, catering to those in urgent need of funds without forfeiting the interest accrued on their deposits.
This loan facility is designed for convenience, exempt from processing charges or the need for document submission. ABA Bank outlines that the interest rate on these loans is generally set at 3% above the deposit’s ongoing interest rate, with the loan term coinciding with the deposit’s maturity date.
Wing Bank’s recent entry into this market segment with its ‘Wing Bank Digital Loan Against Term Deposit’ enables customers to borrow up to 90% of their deposit value. For instance, a customer with a $10,000 deposit could be eligible for a loan up to $9,000, with the ceiling for loans per deposit set at $50,000.
Wing Bank emphasizes that customers’ deposits will continue to accrue interest, underscoring the bank’s commitment to innovative, customer-friendly products. According to Han Peng Kwang, Wing Bank’s CEO, this service not only provides immediate liquidity but also offers flexible repayment options, allowing customers to repay the loan either before the deposit matures or according to a personalized repayment plan.
The process for applying for these loans is straightforward, available through the banks’ mobile apps or in-branch, with online approval and direct fund disbursement into the customer’s account. This approach eliminates processing fees and credit risk assessments due to the collateralization of the term deposits.
Wing Bank offers competitive interest rates, up to 9% on certain term deposits, with options for customers to hold their funds in either riels or US dollars.
ACLEDA Bank has also embraced this model, approving instant loans up to $200,000 (or 800 million riels), contingent on the customer’s deposit size. The process is facilitated through ACLEDA’s mobile app, featuring a seamless and paperless application and approval process, requiring only digital authentication such as touch ID, facial recognition, or a PIN.
These developments represent a significant shift in Cambodia’s banking sector, providing customers with flexible financial solutions while ensuring the security and growth of their long-term savings.
Source: Khmer Times
