Logo of Phnom Penh Post newspaper Phnom Penh Post - Fintech could be ‘game changer’

Fintech could be ‘game changer’

A man looks at a Bongloy Checkout demo page on his smartphone yesterday in Phnom Penh.
A man looks at a Bongloy Checkout demo page on his smartphone yesterday in Phnom Penh. Pha Lina

Fintech could be ‘game changer’

A delegation from China visited Phnom Penh this week to share tips on how Cambodia can increase its financial inclusion and meet the needs of its under-banked population using financial technology, or fintech.

Chinese government officials, fintech experts and impact investors joined a networking session on Wednesday evening aimed at promoting development and regional partnership for financial inclusion between China and Cambodia.

Addressing the delegates, Chea Serey, director general of National Bank of Cambodia (NBC), stressed the role and importance of digital finance initiatives in broadening financial inclusion. She said digital finance could be a “game changer” for Cambodia’s nascent financial sector as it enables financial service providers such as microfinance institutions (MFIs) “to reach more remote areas at a lower cost in a safer way and at a larger scale”.

Serey said the central bank was looking to support MFIs and digital finance, which together were increasing financial inclusion and lowering poverty rates.

“Realising that digital finance is a key to reaching the unbanked and under-banked [population], the NBC has created an enabling environment for institutions to deliver basic financial services through the licensing of payment services providers,” she said.

The Asian Development Bank optimistically projected earlier this year that fintech has the potential to generate over $1.7 billion in additional electronic payment flows in Cambodia, fuel more than $2.5 billion in additional credit uptake and mobilise more than $500 million in savings.

Serey said that while the NBC was dedicated to developing a national financial inclusion strategy, the private sector had to take the lead in banking the millions of adult Cambodians who still lack access to formal financial services.

“[The] NBC has played the role as a regulator, and the banks, financial institutions, investors and regulatory bodies must play a more active role in filling the gap of financial inclusion,” she said.

Duoguang Bei, president of the Chinese Academy of Financial Inclusion, one of the event’s organisers, said China has long-recognised the value of fintech in increasing financial inclusion and was taking proactive steps to increase its usage. He said 80 percent of China’s 1.4 billion citizens have already tapped into traditional or digital financial services. The government has targeted 100 percent by 2020.

Bei said financial inclusion was a top priority for China’s government, which recognises its particular importance for the micro-, small- and medium-enterprise (MSME) sector.

“More banks in China, particularly big banks, are starting to do business with MSMEs,” he said. “Those banks have started to establish special departments for financial inclusion.”

However, Shi Dalong, vice chairman of Bank of Taizhou, said that despite superficial similarities, China and Cambodia must follow different paths for fintech adoption.

“Different countries are faced with different situations,” he said.

“Cambodia’s economic situation is different, and it is also different if we compare it to China 30 years back.”

Pen Chanda, chairman and CEO of Bongloy, a Cambodian online payment gateway, said he is optimistic that the current technological infrastructure would help foster financial inclusion in Cambodia, as it can reach out to customers in rural areas with low costs.

“With a high mobile adoption rate and strong internet coverage, technology will play a key role in building financial inclusion in Cambodia,” he said. “Digital can reduce the costs needed to serve customers in provincial areas where there are high operational efficiencies, and hopefully translate into lower interest rates.”

“Going forward, we will see more financial institutions embracing the solutions provided by fintech companies to develop new products and provide a better experience for their customers,” he added.

MOST VIEWED

  • South Korea’s first lady brings hope to ill boy

    South Korea’s first lady Kim Keon-hee – wife of current president of the Republic of Korea, Yoon Suk Yeol – met with a 14-year-boy with congenital heart disease during her trip to the Kingdom for the ASEAN Summit. After their meeting it was announced that the

  • Hun Sen gets Covid, shuns G20, APEC summits

    Prime Minister Hun Sen said he has tested positive for Covid-19 in Indonesia, where he is slated to attend the G20 summit in his capacity of the ASEAN chair. In a social media post addressing the Cambodian public, he said: “Before leaving Cambodia, I always

  • Moody’s sets outlook rating to ‘negative’ for Cambodia

    US global rating agency Moody’s Investors Service Inc on November 15 announced that it downgraded Cambodia’s outlook from “stable” to “negative” and maintained its B2 local and foreign currency issuer ratings. “The negative outlook reflects a deteriorating external position as illustrated by the severe

  • Hun Sen’s Covid infection caused by ‘weakened antibody’ after summit

    Prime Minister Hun Sen said exhaustion from heavy workload before and during the recent ASEAN Summit may have led to him contracting Covid-19 due to his weakened immune system, while rejecting speculations that the infection was caused by leaders of some countries who did not

  • Korean first lady paves way for ill boy’s surgery

    A 14-year-old boy with congenital heart disease who was lucky enough to meet with South Korean first lady Kim Keon-hee may get the chance of a lifetime and receive surgery and treatment at Asan Medical Center in Seoul, South Korea. After seeing his plight, many

  • Kingdom’s rice crowned world’s No1

    Cambodia’s Phka Rumduol jasmine variety has been crowned the World’s Best Rice for the fifth time at the TRT (The Rice Trader) World Rice Conference in Phuket, Thailand on November 17, according to leaders of the Kingdom’s apex rice industry body. Phka Rumduol