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Cambodians shun banks: World Bank report


A tuk-tuk zooms past an ANZ Royal branch earlier this month in the capital. Photograph: Meng Kimlong/Phnom Penh Post

Cambodian people used banks less than any other country in the Asia-Pacific region last year in percentage terms of using financial services, recent data from the World Bank showed.

The report, released this month, also pointed to high growth in the percentage of borrowers, which insiders said was concentrated in Cambodia’s mircofinance sector.

Informal lending, a threat to the financial stability of many low-income earners, was high above the regional average.

Myanmar and Timor-Leste were excluded from the report because no data was available on the countries.

Only 4 per cent of Cambodians had an account at a formal financial institution in 2011, compared with 27 per cent in Lao PDR and 21 per cent in Vietnam.

The regional average was 55 per cent, taking into account highly banked nations.

Japanese account holders composed 96 per cent of the country’s population over the age of 15.

The number of Cambodians saving at a financial institution was 1 per cent, and the report showed no credit card usage in the country.

About 3 per cent used debit cards.

Savings accounts were set for quick growth in the near future as commercial banks increase access to services, Acleda Bank chief executive and president In Channy said yesterday.

“This number will see dramatic change over the next five years,” he said, adding that households that save could reach a 60 per cent penetration rate during that time.

Savings at Acleda was concentrated among businesspeople and civil servants. The bank had US$1.3 billion in savings deposits, In Channy said.

Debit card users would be slow to grow, he added, citing the low number of debit services available at present.

There were 1.3 million depositors, or 8.8 per cent of the Cambodian population in 2011, according to National Bank of Cambodia figures.

The data stands at odds with the World Bank numbers. The bank’s report took survey samples of the country and figure reflected respondants.

The Kingdom, however, stood behind only New Zealand and Mongolia regarding the percentage of adults who borrowed formally.

World Bank data showed 19 per cent of Cambodians taking loans from financial institution.

More than 90 per cent of people who took loans sought out microfinance institutions, which have a presence in remote areas of the country where banks do not, Sim Senacheert, general manager of Prasac Microfinance, said yesterday.

“MFIs reach out much further than banks now. They are in the rural areas of Cambodia,” he said.

MFI loans average at about $500. There were $707.95 million in loans from the country’s 29 MFIs in the first quarter of this year.

Total loans in Cambodia in 2011 were worth about $4.07 billion, according to data from the National Bank of Cambodia.

A worrisome figure in the World Bank report was the percentage of Cambodians borrowing informally from friends and family members: 39 per cent in 2011.

Informal lending often carries annual interest rates of more than 50 per cent, the Post reported earlier this year, and can result in high levels of debt for rural borrowers that seek out such means of funding.

Cambodia’s level of informal borrowing was second only to Indonesia, where 42 per cent of people took loans from somewhere other than a bank or MFI, the report showed.

The regional average was 27 per cent.

To contact the reporter on this story: Don Weinland at



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