In a country where “cash is king”, it is hard to find an ordinary Cambodian who owns a bankcard, even more so a credit card.

It was not until a mere five years back, in 2011, that a national credit bureau was established; the Credit Bureau Cambodia (CBC), a private company licensed and regulated by the National Bank of Cambodia (NBC) to operate the credit bureau which oversees credit information and functions.

As with all centralised credit bureaus in mainly developed countries, the CBC exists to promote financial stability by providing businesses information on how to manage credit risks, avoid fraud, and make more informed decisions. On a more personal level, the bureau assists individuals in checking their credit reports, ensuring that they have access to loans and finance by maintaining a good repayment record.

However, according to Cynthia Liaw, CEO of Maybank Cambodia, the Kingdom – although a dual-currency economy, thus having a potentially good environment for card acceptance – does not have a wide merchant compliance of credit cards.

Liaw believes that the main hindrance to why credit card usage has not taken off in the country is due to the absence of a bankruptcy law, while “the option for consumers to change their national ID makes it challenging for financial institutions to offer unsecured loans with no fixed repayment or maturity tenor like credit card services to consumers,” she added.

Nevertheless, since the inception of the CBC in 2011, the average growth in the number of credit card users has been at a steady rate of 47 per cent per annum, according to Pascal Ly, CEO of CBC. All financial institutions licensed by the NBC to operate in the Kingdom are members of the CBC, which comprises 120 members today.

The number of credit card users is now over 28,000, while the number of commercial banks offering credit card services has expanded by an encouraging 83 per cent since 2012, Ly said.

Although the use of credit cards in Cambodia is limited to the capital and major tourist areas, more businesses and consumers are opening up to credit cards.

“The usage of credit cards requires both the businesses and consumers to see an advantage to use it,” Ly said.

He adds that the pace set by the NBC and the CBC is currently on track to make this happen and further increase the average growth.

Ly, however, acknowledges it is true that some people right now still prefer to use cash, seeing it as a more convenient way to control their real-time, physical money.

On a more promising note, he continues, some people “have turned their expenditures’ habit into credit card usage due to those who have found the convenience of having a credit card comparing to the carrying of physical cash.”

Maybank’s Liaw echoed this, saying “payment via cards is more rewarding than payment via cash.”

Nonetheless, Maybank (Cambodia) does not offer credit card services. Instead, it taps into the safer option of debit cards, offering as many as three different types to its customers – all with a rewards system that encourages the continuous use of the card, in collaboration with big-brand names such as Lucky Supermarket, Guardian, and Aeon Supermarket.

Independent economist Teng Delux, however, is optimistic that credit cards will be widespread among Cambodians in the coming years, with the entrance of more banks to accommodate the country’s free-market economy and steadily rising economic growth.

“The mindset of the older generation of Cambodians is that cash pays for everything, so they are not the target audience for banks that wish to offer credit card services. However, the younger generation is now more open and educated, and even though it has not reached the level of using credit cards, they are slowly opening up to using other bank cards like debit or ATM cards,” he said.

With the current 83 per cent of the Kingdom’s commercial banks offering credit card services, Ly is also optimistic that the number can only increase as Cambodians start to understand the practice of using credit cards in the very near future.

“Once critical mass is reached, then usage will spread both among business owners and consumers,” CBC’s Ly concluded.