Since 1994, when KPMG started business in Cambodia, the banking and finance sector in Cambodia has changed. “There has been a lot of progress and development in this field,” says Nge Huy, audit partner with KPMG.
He says the number of banks and micro finance institutions has been increasing and lately, international players are coming into Cambodia, through acquisition or merger with the existing local banks or micro finance institutions here.
While in the past Cambodian banks didn’t invest abroad, some local banks have started to expand their operations in other countries, such as Laos or Myanmar, according to Nge Huy.
He also said micro finance institutions are expanding to the rural areas. “So that means so far the rural people now have more access to finance compared to the past,” he says.
KPMG Cambodia offers service in the field of audit, tax and advisory. According to Nge Huy, financial sector audit it one of the strengths of KMPG in Cambodia and across the globe.
He says in Cambodia, the majority of KPMG’s work is within the audit, which is also required by the National Bank of Cambodia.
Auditing commercial banks and micro finance institutions requires a license by the National Bank of Cambodia. In Cambodia they have been working with a number of banks, both local and international ones.
Nge Huy, a Cambodian national, started his career with KPMG Cambodia in 1997 after graduation. Besides KPMG, he is also the vice president of the Kampuchea Institute of Certified Public Accountants and Auditors.
According to Nge Huy, the US dollar is still the dominating currency within the commercial bank sector. He says the majority of the commercial banks are offering loans mainly in US dollar.
“But we have seen some changes through the microfinance sector,” he says.
“Because they are the ones operating within the rural areas so within the rural people and some of them are offering loans in Khmer riel rather than US dollar.”
Nge Huy says education is one of the challenges for the banking industry in Cambodia.
“The important matter is the trust and confidence among the users,” he says.
Studies, workshops, conferences, or seminars could educate the people to understand the benefits of using a bank account and disseminate the knowledge to the public. He says for that, the universities also play an important role.
Another challenge is the conversion of the existing Cambodian accounting standard to comply with the full international financial reporting standard, according to Nge Huy.
He said by 2016 all commercial banks and licensed micro finance institutions have to convert to IFRS, the International Financial Reporting Standard, which is adopted by Cambodia as well.
He says originally all commercial banks and license micro finance institutions had to comply with the conversion by 2012 but because of the complication of this standard, the national bank is requesting to delay the implementation to 2016.
“In order to comply with that there is a lot to do,” Nge Huy says.
To contact the reporter on this story: Anne Renzenbrink at [email protected]