Written by DAP NEWS -- Wednesday, 23 September 2009
CAAI News Media
The Ministry of Economy and Finance (MEF) on Tuesday debated publicly collateral regulations for the first time before they are finalized and implemented.
The collateral business has become a very important sub-field in current situation and providing loans for collateral markets is becoming a popular market for the informal economy, which is present in almost all developing countries, Keat Chhon, deputy prime minister and MEF minister, said in remarks at the debate opening in Phnom Penh.
“Capital movement in collateral markets has helped to process regularly for business transactions and helped social affairs and culture,” he said, adding that the Cambodia must now reduce risks. “We are organizing the declaration from the MEF to allow all collateral businesspeople to apply for licenses from ministry. It will be legally regulated.”
The legislation has already made the rounds of the ministries many times and now ideas are being asked from experts, the private sector ad other interested parties, he added. “The collateral business will be better placed for competition and providing good quality services with low interest rates,” he said. “At the same time it also will help to push the economic development of the country. Finally, it will help contribute to poverty reduction and contribute to national income.”
“The collateral businesspeople will be legal and they will not fear … risks.”
According to My Van, director of the MEF’s Department of Finance Industry, all collateral businesspeople must have the capital of US$50,000 by law and must deposit 10 percent of this capital at the National Bank of Cambodia. This amount is higher than Singapore, the US, and Philippines, he claimed, “but we have to avoid cheating from the traders.”
The interest rate for will be less than 5 percent per month, “higher than other countries which we have studied,” he conceded. The price of an MEF license will be around US$250, he said, adding that all businesspeople must pay income tax of 15 percent per month.
Some collateral businesspeople who joined the seminar said that they do not support the legislation because the capital requirements and taxes are too high. Some who asked not to be named said they would continue business as usual without an MEF license.
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