The National Bank of Cambodia (NBC) joined the Alliance for Financial Inclusion (AFI) last week, a Bill & Melinda Gates Foundation-funded network of policymakers aimed at increasing financial access to the poor.
Cambodia is the 95th country to join the AFI, which is administered by German development agency GIZ and based in Kuala Lumpur.
In a statement released on January 12, the AFI praised Cambodia’s central bank for providing a regulatory environment that helps microfinance institutions transition into the commercial financial sector.
“These regulations have also paved the way for non-deposit taking microfinance institutions to transition to specialised banks, and ultimately become some the largest banks in the country serving millions of customers, especially low income households,” the statement read.
NBC director Chea Serey said joining the AFI would enhance the NBC’s reputation and help develop policies targeting financial inclusion.
“The National Bank of Cambodia is now cooperating with other development partners and agencies, such as the International Financial Cooperation (IFC), to prepare more regulations and possibly guidelines for financial inclusion and financial consumer protection,” Serey said via email.
The NBC director added that the banking regulator will be hosting several conferences in 2015 aimed at bolstering public awareness of financial services and improving consumer protection.
An estimated 2.3 million Cambodians or 15 per cent of the population have bank accounts, according to a May 2014 estimate from Serey.
“It’s not so difficult to obtain financing anymore because there are so many financial institutions here now,” said In Channy, CEO and founder of Acleda bank, which began as a microfinance institution itself.
However, Acleda is the only bank to have successfully made the transition to commercial finance.
“So far, I haven’t seen much of that, except for Prasac,” Channy said, referring to Prasac bank, a microfinance institution that applied to become a commercial bank in 2012, but has yet to be approved.
Charles Van, president of the Association of Banks in Cambodia, said that despite few microfinance firms advancing to commercial bank status, the NBC has played a key role in buttressing the overall financial system and increasing access to banking services for small enterprises.
“The majority of the small business sector especially is now dealing with financial institutions,” Van said.