The Cambodian banking and finance sector has been marked by steady growth and structural improvement since the global financial crisis hit Cambodia in 2009.

On average, commercial banks have increased their revenue by about 20 per cent per year since 2007, grossing $637million at end of the financial year 2013.

In the section dedicated to the commercial banking sector on pages 4-14, our reporters will take a closer look at 10 of the 43 banks that are operating in Cambodia today. We will show you how different the banks are and how their size, corporate ethics and country of origin shape their product range. One bank, for example, adamantly avoids what they consider “risky” products in retail banking. Another bank with a strong expat customer base took a gamble on their clients’ affinity for technology and successfully introduced credit cards, ATMs and online banking to the Cambodian market.

On page 27, we will discover how Cambodian-founded WING acquired a specialised banking licence and wrote history by becoming the first mobile payments operator in the world.

In addition to banking, we also look at the vibrant microfinance sector (MFIs, pages 17-25) that serves more than 2 million customers as of mid-2014 and is marked by growth and diversity. From 17 institutions in 2007, the amount of MFIs has more than doubled to 35 today.

During the past financial year, MFIs reached a combined revenue of around $205 million and could increase profits by around 37 per cent, with accumulated profits of around $53 million – a figure economist and SME expert Dr Dy Sovann of the general department of sub-national administration finance in the Ministry of Economy and Finance thinks is not high enough despite real economic growth of more than seven per cent over the past few years.

Together with Dr Dy, we challenge the common assumption that SMEs merely don’t need much capital to be productive. Much of Cambodia’s productive potential remains untapped. At just above 40 per cent, the country has one of the lowest debts per GDP ratios in all of Asia. More loans available to businesses, however, would mean faster growth and development.

It is not that financial institutions won’t lend money to Cambodians for they fear they won’t recover their debts – rather, credit availability and knowledge about borrowing for business as investment opportunity have not fully reached rural areas.

In fact, the rate of loans that are not paid back on time in Cambodia is at a remarkably low 2.5 per cent, and only a quarter of these NPLs (non-performing loans) are not paid back at all. To borrow a phrase from HBO’s Game of Thrones, a

Cambodian always pays his debts!

Yours,

Julius Thiemann

Special Reports Editor

* The overview of Cambodia’s banking and finance sector was compiled with data on the financial year 2013-2014 from Mekong Strategic Partners, the National Bank of Cambodia, Open Development Cambodia and information sourced from interviews with sector professionals and used in the production of this Special Report.