BIDC and Sonatra approve credit and banking agreement for home buyers

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The Investment and Development Bank of Cambodia (BIDC) and the Sonatra group signed a cooperation agreement on Wednesday. Photo provided

The Vietnamese Bank for Investment and Development of Cambodia (BIDC) and the local group Sonatra have partnered to provide banking and credit services to homebuyers, with the aim of promoting business activities and meeting the needs of households. Cambodians looking for new accommodation, according to a joint press release.

A cooperation agreement was signed for this purpose on January 5 by the CEO of BIDC Lam Van Hai and the president of the Sonatra Sorn Sokna group.

The deal is expected to help develop Cambodia’s real estate and financial markets, the statement said.

At the signing ceremony, the two sides pledged to build on each other’s strengths and strengthen their cooperative business activities to become comprehensive strategic partners and ensure long-term and sustainable cooperation, t -he declares.

Accepting purchase contracts as collateral, EBID is offering loans of up to $ 35 million to home buyers in the development of the Borey Sonatra gated community in Koh Krabei village, Prek Thmey commune, Chbar Ampov district, Phnom Penh, he added.

He said the loans have quick approval times, an annual interest rate of seven percent, a one-year grace period and a 20-year term.

The Sonatra group is committed to promoting the use of banking, financial and insurance services provided by EBID and its subsidiary Cambodia Vietnam Insurance Plc, according to the statement.

The local company will facilitate consultations and guide clients on using banking services and obtaining loans from EBID, and is committed to securing long-term benefits for homebuyers and the bank, a- he added.

Cambodia Real Estate Association (CREA) chairman Kheang Puthy told The Post on January 9 that people now understand the risks direct installment loans pose to real estate developers.

He said the deal would benefit everyone involved: the developer gets their money back faster to move on to other projects, and buyers receive legal title to the property and get credit at decent interest rates. .

The installment payment plans offered by real estate developers typically involve a monthly interest rate of one percent – or about 12.7 percent per annum – which is significantly higher than the seven or eight percent usually cited by banks, he said.

He encouraged Cambodians to get a mortgage loan from a bank to buy a house and avoid risks, stressing that these institutions thoroughly check every aspect of the application before approving credit, including land titles, licenses. development and the location of the developers.

Ky Sereyvath, an economics researcher at the Royal Academy of Cambodia, noted that while EBID and the Sonatra group could benefit from the deal, the real estate sector is in a rut with sellers overtaking buyers.

“That is why it is encouraged for those who do not have a lot of money to buy houses through the banks,” he told The Post on January 9, warning that if nothing Major is not done, the sector could be heading for problems, much like during the financial crisis of 1998.

The press release indicates that EBID has registered capital of $ 100 million and total assets of approximately $ 850 million, with outstanding loans of over $ 600 million. The bank has nine branches in key economic areas of Cambodia and Vietnam.

EBID has always organized and provided credit and banking services for many large projects and partners in Cambodia, the statement said.

Through 13 subsidiaries, the Sonatra group operates in several sectors, such as real estate, finance, securities, catering and agriculture, he added.

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