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Financial institutions see jump in lockdown-era digital transactions

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More and more consumers are reportedly taking to digital channels to conduct transactions amid lockdowns and other movement restrictions. Hean Rangsey

Financial institutions see jump in lockdown-era digital transactions

Financial institutions (FI) logged a sudden spike in digital transactions during lockdown, adding further to the upward momentum fuelled by rising fears triggered by a spike in new Covid-19 cases found in connection to the February 20 community transmission.

The government on April 14 announced a full lockdown in the capital and neighbouring Takmao town in Kandal province from April 15-28 to control the risk of spreading the novel coronavirus.

And the National Bank of Cambodia (NBC), the central bank, in an April 20 statement called on FIs to encourage the use of digital and mobile payments wherever possible, stressing the safety, convenience and speed that they offer.

Cambodia Microfinance Association (CMA) Communications Department director Kaing Tongngy told The Post on April 22 that CMA promotes these means of payment among members at every turn, noting their importance to microfinance institutions (MFIs) for keeping costs low and boosting efficiency.

“Cashless payments are more important during lockdown than ever to reduce the potential spread of the pandemic.

“And although many FIs don’t have digital platforms themselves for clients, they are partners with remittance providers or other larger FIs that do have them,” he said.

He explained that clients wanting to repay loans to MFIs during the lockdown period are still able to do so through AMK Microfinance, Wing, Acleda Bank’s ToanChet App, ABA or other FI’s digital channels.

He added that most digital platforms created by FIs are “very well connected” through a new fintech product developed by NBC called “Bakong”.

Prasac Microfinance Institution Plc senior vice-president Say Sony told The Post on April 22 that internet banking services such as money transfers, as well as bill and loan payments are available online for the MFI’s clients to reduce direct contact and maintain social distancing.

“On the top of that, we are also a member of the Bakong System, Retail Pay and Cambodian Shared Switch [CSS], so clients can perform inter-bank transactions with more than 20 FIs,” he said.

He said Prasac’s clients processed 3,933,214 transactions totalling $78,467,583.83 through mobile and internet banking services, and 305,168 transactions to the tune of $24,980,013.51 at ATMs.

While CMA does not have concrete data on digital payment patterns during the lockdown, Tongngy indicated that initial observations revealed a significant increase in usage due to movement restrictions.

Though most MFI offices are closed in lockdown areas, those with ATMs are trying to ensure their clients are able to withdraw money 24/7, he affirmed.

Tongngy explained that the option to repay loans “is still available to clients who are willing to pay via partner FIs, while clients who cannot repay will be remotely requested to [apply for a] loan restructuring”.

FIs in Cambodia require client consent to restructure loans.

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