National Bank of Cambodia (NBC) governor Chea Chanto said on Monday that the Kingdom’s economy has maintained robust growth with low and manageable inflation which paves a favourable path for the banking sector’s continuous development.
Meanwhile, fintech is playing an important role in the financial inclusion giving more financial access to residents in rural areas.
Speaking at the 22nd Asean Banking Conference and 49th Asean Council Meeting, Chanto said Cambodia’s banking sector had been developing very fast in the past few years thanks to the sound macroeconomic stability and investment-friendly policy of the government.
“This year, the Kingdom’s economy is projected to grow at a similar rate, driven mainly by continued inflows of foreign direct investment [FDI], high export growth and strong domestic demand.
“The banking sector in Cambodia has been growing both in scale and scope securely and inclusively. As of July, assets in the banking system had increased to 114 per cent of the GDP,” he said.
At the same time, he said technology development has significantly contributed to expanding and strengthening the banking sector in Cambodia as well as in the Asean region.
“Along this line, banks and financial institutions have increased the use of technology and introduced new financial products and services.
“This had given greater convenience to the daily lives of customers through cost reduction and less time spent by both the banks and their customers.
“As a result, support is given to the growth of economic activities and the level of financial inclusion had increased,” he said.
In late July, NBC projected that the country’s economic growth would remain sound with an average rate of 7.1 per cent by the end of this year supported by growth in exports as well as the construction, real estate and tourism sectors, while the agriculture sector was still slow-growing.
At the opening of the conference, Association of Banks in Cambodia and Acleda Bank president In Channy said that as a young and developing country, Cambodia has been building itself rapidly with annual GDP growth averaging around seven per cent over the past decade.
“Today Cambodia is a lower-middle income country and has a bright economic future ahead as we continue to develop our strengths, skills and people.
“Other than the strong political will that has helped rebuild our country from scratch, I believe that technology has played an essential role in driving the restructuring process which got us so far against all expectations,” he said.
“It [banking] is a very competitive sector but we compete on a level playing field under the guidance of the NBC. We are very much engaged in the development of a robust and inclusive society by offering technology-supported services to our customers,” he said.
Canadia Bank CEO Raymond Sia said: “Canadia Bank is one of the largest commercial banks in Cambodia and we are working very much closely with fintech companies to give our customers a better experience.
“We are expecting double-digit growth for both the loan and deposit sub-sectors over the next few years, which would reflect the sound macroeconomy,” he said.
Phnom Penh Commercial Bank (PPCBank) president Shin Chang Moo also pointed out that in the past few years, the Kingdom’s economy largely depended on Chinese investment, especially in the real estate and construction sector.
However, he observed that recently there had been a lot of investment from other countries like Japan and Korea.
“They [Japan and Korea] are not interested in real estate as they prefer infrastructure, such as logistics, warehousing and manufacturing – meaning that the FDI seems to be much diversified.
“At the same time, there is a lot of potential in Cambodia’s banking industry where the country is recording eight per cent of GDP [growth]. This means we will get a lot more growth for the banking industry,” he said.
Total assets in the banking and microfinance sector had increased by 19.2 per cent to $44.8 billion at the end of the second quarter of this year.
And, there were 44 commercial banks, 15 specialised banks, seven microfinance-deposit taking institutions, 74 microfinance institutions, 254 rural credit operators, 15 leasing companies and 16 payment service providers as of the second quarter of this year.
The banking and microfinance headquarters and branches have increased up to 2,367 locations with 2,228 ATMs across the country, according to the report from NBC.
