When ACLEDA Bank obtained a license in 2000, the bank ranked number 13 of the then 13 banks in Cambodia – both in terms of loan portfolio and saving.

In 2007, the bank ranked number seven before climbing up to the top in 2010. Not only ACLEDA Bank has grown but also the whole banking business in Cambodia as well. By the end of last year, the Kingdom counted 28 banks while now around 32 banks operate in the country, according to In Channy, CEO of ACLEDA Bank.

“The number of banks continues to grow,” In Channy said, adding that many players in a small market such as Cambodia cause price competition.

ACLEDA (Association of Cambodian Local Economic Development Agencies) was established in January 1993 as a micro finance institution for micro and small enterprises’ development and credit before obtaining a ‘specialised’ banking license in 2000.

Despite the success of ACLEDA, CEO In Channy, looks back on a background that initially had nothing to do with banking and finance.

During the Pol Pot regime, he was assigned to take care of 320 cows in Cambodia. After being evacuated out of Phnom Penh, he went to Battambang and, at the age of 15, he counted cows every day.

“Each morning, I had to do the count, make sure I had 320 cows, before I sent them to the field. And every day, when they would come back, I had to count them up again. If one was missing, it meant I would be killed,” he said.

“If one was missing I had to know why. If a cow died, I had to report immediately that it did and why it did. If a cow was born, I also had to report it,” he said.

In 1981, he fled over the border to Thailand and stayed in a refugee camp until 1989, where he worked as an English teacher. In 1989 he got a scholarship to study one year in Pennsylvania, in the US. “I thought I should change career from teaching to business accounting. So I took the course called business organisation and management,” he said.

But upon his return to the camp in 1990, he continued to teach because the camp had no business or firm requiring accounting and bookeeping. But he taught accounting and business instead until In Channy returned to Cambodia in 1992. Back in Cambodia, he worked with the UNDP and ILO program until establishing ACLEDA with a group of friends.  

“That was my background,” he said. “From taking care of the cows, becoming a teacher, education program in the camp, college in the US, choosing accounting, business organisation to change careers but when coming back continuing to teach.”

The increase in the number of banks in Cambodia comes along with a growing number of bank accounts among Cambodians. According to In Channy, the total number of bank accounts last year totaled 1.2 million. “But this year I can see that the number can be doubled,” he said, adding that the expansion of micro finance institutions in Cambodia contributes to this development.

According to In Channy, the loan growth rate this year is around 30 per cent. He said the majority is spent for agriculture, such as crop and animal husbandry. Other usages of loans include trade, repairing and fixing, as well as housing and consumer loans.

To make these banking services accessible for everyone, ACLEDA Bank hast started a mobile phone bank network called Acleda Unity in 2010, allowing transactions on mobile phones.

“So far there are 350,000 workers in the garment industry. Normally the workers travel home at the end of the month to bring small money to their family,” In Channy said. “But with the mobile phone banking, they don’t need to do that.”

According to In Channy, transactions can be done on the phone, saving time and transportation costs to travel home. “And they can still talk to their parents by phone,” he said. ACLEDA’s mobile phone bank is connected to the core banking system, allowing to see immediately when, for example, a business partner transfers fund into an account, In Channy said.  

Mobile phone banking is expanding, also because of the role a mobile phone plays in Cambodia, according to In Channy. He said the number of mobile phone subscribers is almost equal to the number of people in Cambodia.

“So I see that the equipment is at home, at the customers’ home already, every home has one telephone,” he said, adding that it just requires the network and system connection to enable transactions. “Then it’s like the bank in their hand,” he said.

The mobile phone banking also enables transactions for people on the countryside, where, according to In Channy, the local Cambodian currency still prevails. He said people in the countryside mostly require riel for payments and purchase goods in riel, and if they get offered US Dollar, they use an exchange rate more favourable to the riel.

In Cambodia’s urban area, in turn, foreign currency is more used than the local currency and people will first ask for the US dollar.

To contact the reporter on this story: Anne Renzenbrink at [email protected]