Nearly nine out of 10 Cambodians have confidence in local financial institutions, a trend that stands in sharp contrast to Europe and the US, a poll published last week found. However, industry insiders question the results, as the Kingdom’s financial services are still under-developed.

The poll from research-based consulting giant Gallup said that 87 per cent of Cambodians trust their banks. Gallup surveyed 1,000 Cambodians in April last year.

“In sharp contrast to Europe and the US, many Asian countries have weathered the global financial crisis well and emerged with considerable economic momentum. This momentum helps explain why confidence in financial institutions was highest in Asia last year – particularly among emerging markets in Southeast and South Asia, where median trust was 77 per cent and 75 per cent, respectively,” the Gallup press release said last Monday.

However, industry insiders said the survey outcome seems unusual for a country that still only has 13 per cent penetration of banking services across the population.

“If the level of trust really is that deep, why is such a small proportion of the population holding bank accounts?” Grant Knuckey, chief executive of ANZ Bank, told the Post.

Other factors may have affected the poll’s results. On its website, Gallup mentions that the survey was conducted only in urban areas and more respondents than expected report a completed secondary education, which may have impacted the findings.

“On the surface, [the result] should mean that banking sector penetration will continue to grow. However, given the very low existing penetration, [the poll] would suggest that a lack of trust is not a major reason Cambodians have relatively low usage of banking services,” Knuckey said. Other factors, like geographic spread and ease of usage, are also relevant for low usage, he added.

But other industry insiders said they’ve seen growing trust in financial institutions in the Kingdom.

“We observe that in Cambodia, as well as in other countries in Southeast Asia, people’s trust in their banking institutions is quite strong,” Annette Dixon, country director for the World Bank, told the Post.

This trust is reflected in the growing volume of bank deposits and the increasing number of bank accounts, she explained. The total number of deposits in the banking system grew last year by 29 per cent, according to figures of the National Bank of Cambodia.

“The perception that banks are safe is also a reflection of good economic performance and absence of major bank failures in the recent past in East Asia and the Pacific region,” she added.

“However, Cambodia still has a long way to go in terms of financial inclusion.”

In 2011, only 4 per cent of adults in Cambodia had a bank account, according to data collected by the World Bank.

Nguon Sokha, director general of the National Bank of Cambodia (NBC), said she has seen an increase in public confidence. However, trust has to be earned by all stakeholders, she added.

“The government, the NBC, and the banking community have each played their role very well, so far, in terms of developing the banking and financial sector, ensuring macro and financial stability, promoting good governance in the industry, providing quality and affordable services – and thus promoting confidence,” she said.

The increase in loans reflects the increase of trust, said In Channy, Acleda Bank’s CEO and president.

In the first quarter of this year, the value of loans outstanding increased by 5 per cent, he said. “We expect at least a growth by 20 per cent this year.”