ACLEDA Bank CEO In Channy. Photograph: Low Wei Xiang

The Cambodian bank with the largest number of branches has expanded successfully not only into Laos, but most recently into Myanmar.

According to ACLEDA Bank CEO In Channy, the secret for success outside of Cambodia came down tocombining careful customer selection with the generosity and courtesy of inviting of foreign officials to receive training in Cambodia.

In an interview at his office on February 15, In Channy said ACLEDA Bank submitted an application in Myanmar for a microfinance license in September 2012. That same month they got a company registered office that same month and an operating microfinance license just a few weeks ago on February 8, enabling ACLEDA to work in 25 townships in Yangon.

“Now we have all license requirements to kick start our operation in Myanmar,” In Channy said.“We have 25 Myanmar staff plus 11 training in Cambodia for a total of 36 Myanmar staff.”

In Channy says ACLEDA will service low income people in Myanmar, starting in Yangon, serving all kinds of people from every religion with no discrimination.

“We know how to work with those different religions, and we can work with any minority groups and any form.”

ACLEDA, which evolved from an NGO into Cambodia’s most widely distributed bank, starts by recruiting staff fresh from university.

“Other Banks require professional staff.  We recruit straight from university.  We take a long term plan,” In Channy said.

Another differentiation between ACLEDA and its rivals is the selection of low-income people as customers.

“We are targeting the low-income community, generating business activity in the local community rather than existing large corporations,” he said. “We are believers in the model of starting at the grass roots level, bringing them up and [then] they become a customer of a larger institution.”

In Channy said that model did not preclude existing business people to join ACLEDA.

“We service the low income people with respect.  We don’t want them to feel small. They use our services and we show respect to them.  Our model is to bring them along with us, grow with us.  We provide our financial services with respect and we don’t want them to be only a one time customer.  We want them to be a customer for a long time, and provide the services for a long time.”

In Myanmar as well as in Cambodia, ACLEDA provides customers and small business people with assistance, In Channy said.

“We help calculate costing, stock in, stock out.We help them from simple business plan development, how to cost their specific product, how to price it and how much is the right price.  This is the basic business consultancy service for those micro enterprises.”

The interest rate ACLEDA is allowed to charge in Myanmar is capped at 30 per cent per annum on loans they provide.

ACLEDA’s desire is to have the Myanmar team manage the operation, which according to In Channy, is a natural consequence of the good relationship between the Cambodian and Myanmar governments.

One initiative that facilitated ACLEDA’s success was inviting officials from Myanmar’s central bank to visit Cambodia, go to ACLEDA Bank branches, talk to customers and meet with people from the National Bank of Cambodia.

As a result of that groundwork, In Channy said the Myanmar officials approved the application in the short time between June and September last year.

“We understand the law and we didn’t want a representative office like other foreign banks have in Myanmar,” In Channy said. “We didn’t want the status as a bank. We wanted to start financial services from day one and this is the reason we applied as microfinance instead of a bank.”

The foreign banks operating in Myanmar today - 28 in all - mostly function only as representative offices, according to In Channy.

He says the quality of available human resources in Myanmar is vastly different to those in Cambodia.

“They have all their institutions in place with no interruption.  Cambodia got interrupted.  Their [Myanmar] infrastructure remains good, so the situation is very different than Cambodia, but the fact that they are looking to transform their government process is similar.  They are transforming from a tight control, to a system that is more open for more democracy, so the transformation process is similar.”

Another factor in ACLEDA’s Myanmar success, according to In Channy, has been a culture that differs from other banks: asking a lot of questions from customers right from the beginning during a screening process.

“For other banks if customers pay off their loans early, they might pay a penalty.  We don’t work that way.  We ask customers to share with us and we share with them too and when they tell is the truth we give them access to financial services. We tell them right from the beginning how transparent we are and we lend based on information - other banks lend based on collateral.” he said.  “That’s how we are different.”