To celebrate Indonesia’s 76th Anniversary of Independence from August 17 – 24 Cambodia Investment Review will be highlighting business and investment opportunities for Indonesian’s in the Kingdom of Cambodia.
Given the relatively small population Cambodia has one of highest number of banks and financial institution catering to the needs of is 16 million population in ASEAN. With well over 120 commercial banks, specialized banks, microfinance and leasing companies, this country will see the following happening amongst other things in the coming 2-5 years:
- De-dollarisation – with the strong support of the NBC (National Bank of Cambodia) in taking the lead to encourage customers and general population of use KHR, the share of using KHR loans has increased to 11% as of 2021 from 1% 4 years ago in 2017. The push comes in many forms whereby over 3100 ATMs are in place to dispense and offer services in KHR, banks have also significantly increased the KHR denominated share of their outstanding loan portolios, higher interest rates on depositors’ savings, and KHR loans offered in similar rates as foreign denominated loans. Apart from that, ABC (Association of Banks in Cambodia) have increased activities relating to financial education and literacy to population namely in the provinces to increase awareness. No doubt this will take some time, but while the economy is growing, so does the independence and international acceptance of the KHR.
- Consolidation of banks and micro-finances – while we have not seen much of a consolidation in the commercial banks, we do see some of the microfinances that are consolidating or closing up due to negative profitability. It could be imminent that the consolidation will come and the smaller ones will see closure or merger in the coming years, as it will not be profitable in the longer run for the smaller outfits given the size of the market.
- Introduction of Hire purchase for car and machinery loans – as the population and market grows to be more affluent and more working class coming up the bell curve, the Ministry of Economic and Finance will be looking into a framework for Hire purchase with proper guidelines. This will be able to support the population better in terms of car and machinery financing like its’ peers in the ASEAN region.
- Growth of Bakong and Retail Pay System signifies the NBC in ready for a local switch on transfers as well as Payments in general. Much effort has been seen with lots of traction to work with all banks and Microfinance companies to drive the usage of Bakong and Retail pay to make it fully adoptive and successful. As time goes by, we will see higher adoption rates and possible mergers of PSPs , QR pays as well as a unified framework that satisfy all parties in the 4-party equation of QR acquiring bank/PSPs , Retail Pay, merchants and customers.
- Strong growth fueling the Macroeconomic indicators where by the Cambodian Industrial production to increase &.1% in 2021 and 7% in 2022, the Cambodian Agriculture sector is expected to grow by 1.3% in 2021 and 1.2% in 2022 and the Tourism-related services sector is expected to increase by 3.3% in 2021 and 6.2% in 2022. With the signing of RCEP (Regional Comprehensive Economic Partnership), mega free-trade deal between its 10 member states and 5 FTA partners, namely China, Japan, South Korea, Australia and New Zealand could also provide a positive influence to trade and economic growth. With this, Cambodia is expected to be expediting internal procedures towards the ratification of the RCEP deal and other free trade deals in the region.
With the above coming on aboard, Massive Distributions see a dire need and complementary fit for its services and expertise in the following areas which are non – core to the banking and financial institutions:
- Outsourcing of Sales and Services functions of banking products and services
- Loyalty system and program management to create stickiness and engagement
- Business process Outsourcing of non-core functions to the bank
- Business efficiency and process automation
- Branding and marketing services
Given our expertise and experience in various fields, we could contribute significantly to the growth of banks and financial institutions. And we are open to collaborate is multiple ways for the companies and industry to grow, giving positive improvements for the Cambodia and its growing population.
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