PHNOM PENH, March 10, 2026 – Cambodia’s central bank has established a legal framework for asset-management institutions to acquire distressed loans from banks and microfinance lenders, as official and multilateral data point to worsening asset quality across the financial system.
The National Bank of Cambodia’s new rules set a minimum registered capital of 200 billion riels, or about $50 million, for asset-management institutions, and require full capital to be deposited before operations begin. The framework also requires debt collection to follow a formal code of conduct and sets licensing conditions for institutions that purchase nonperforming loans and related collateral.
The move gives Cambodia a formal mechanism for secondary sales of bad loans at a time when external monitors have warned of rising credit stress. In its 2025 consultation on Cambodia, the ASEAN+3 Macroeconomic Research Office said the nonperforming loan ratio had risen to 7.8% for banks at end-March 2025, while asset quality had also deteriorated in the microfinance sector. The IMF, in its 2025 Article IV materials, likewise described elevated nonperforming loans and weaker profitability in the financial sector.
The policy does not in itself resolve the harder question of how distressed assets will be priced or recovered. AMRO said Cambodia still lacks a dedicated legal framework governing sales of nonperforming loans to third parties and noted that court processes can face long delays, with anecdotal evidence that some cases take seven to eight years to conclude. That raises uncertainty over whether private investors will be willing to deploy capital at scale, or whether lenders will accept the discounts required to sell troubled assets.
For now, the framework appears designed less as a crisis announcement than as a financial-stability tool: a regulatory channel to move bad assets off balance sheets if qualified buyers emerge. Whether it develops into an active market will depend on enforcement capacity, investor appetite and the gap between official hopes for transparent, arm’s-length transactions and the practical realities of debt recovery in Cambodian courts.
The IMF said in its 2025 review that the authorities did not envisage the central bank providing liquidity support through purchases of bonds issued by such vehicles, suggesting Phnom Penh is, at least for now, seeking a market-based approach rather than a state-backed bad-bank model.
That leaves the significance of the new rules clear but bounded: Cambodia has created the legal doorway for distressed-debt buyers, but not yet proof that a functioning market for troubled loans can operate at the scale the financial system may require.
