Cambodia Investment Review

Cambodia and Singapore Launch Financial Transparency Corridor to Boost SME Trade

Cambodia and Singapore Launch Financial Transparency Corridor to Boost SME Trade

Cambodia Investment Review

The launch coincided with the official visit of Prime Minister Hun Manet to Singapore from June 18 to 19, 2024.

The National Bank of Cambodia (NBC) and the Monetary Authority of Singapore (MAS) announced the commencement of the Financial Transparency Corridor (FTC) initiative. This announcement was made at a ceremony held at the Istana Government House, presided over by Samdech Moha Borvor Thipadei Hun Manet, Prime Minister of Cambodia, and His Excellency Lawrence Wong, Prime Minister of Singapore.

Enhancing Financial Cooperation and SME Growth

The FTC is a consent-based digital infrastructure designed to facilitate the sharing of SME financial data between financial institutions (FIs) in Cambodia and Singapore. This initiative aims to bolster trade and cross-border financial services for SMEs by enabling better credit risk assessments and enhancing the availability of financing. The platform, designed and run by Proxtera Pte Ltd, will significantly improve data accessibility, making it easier for FIs to assess creditworthiness and provide financing solutions tailored to the needs of SMEs.

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Dr. Chea Serey, Governor of NBC, highlighted the importance of this initiative for the economic relationship between Cambodia and Singapore. “The FTC exemplifies the shared vision of the NBC and MAS to support information flows for businesses, particularly SMEs, through enhancing financial trust data for financial services between Singapore and Cambodia. This will promote better access to finance beyond borders,” said Dr. Serey.

MAS Managing Director, Chia Der Jiun, emphasized the strategic benefits of the FTC. “The start of the FTC, with an initial set of financial institutions from Cambodia and Singapore, will support greater access to financial services for SMEs through the exchange of SME financial data on the FTC digital infrastructure. This will create greater business opportunities for our SMEs and participating financial institutions,” he said.

First Transactions and Future Plans

The first batch of institutions involved includes: ANEXT Bank Pte Ltd, Liquid Group Pte Ltd, and Sing Investments & Finance Limited from Singapore, along with Advanced Bank of Asia Ltd, ACLEDA Bank PLC, Phillip Bank PLC, Sathapana Bank PLC, and Wing Bank PLC from Cambodia. These institutions have already begun utilizing the FTC platform for initial transactions.

The FTC has facilitated its first transactions. In Singapore, Sing Investments & Finance Limited will use the FTC to finance JR Group, a leading food services SME, in purchasing raw materials from a Cambodian SME. Liquid Group Pte Ltd will assist with foreign currency payments related to this trade. In Cambodia, Sathapana Bank PLC will leverage the FTC to provide financing to Comin Khmere Company Ltd, an importer of building materials from multiple Singapore SMEs.

NBC Governor Dr. Serey Chea expressed optimism about the FTC’s impact on SME financing. “The start of the FTC underscores our commitment to driving positive change, fostering trade and financial services, and promoting sustainable economic development,” she stated.

Enhancing Financial Transparency and Cooperation

The FTC is expected to expand in subsequent phases, increasing the number of participating financial institutions and exploring new areas such as green finance and trade finance. MAS and NBC signed a Memorandum of Understanding (MoU) in July 2023 to collaborate on this initiative. This MoU solidifies the commitment of both countries to work together in enhancing financial transparency and cooperation.

Prime Ministers Hun Manet and Lawrence Wong also underscored the importance of such collaborative efforts in enhancing bilateral ties and economic growth. “This initiative is a testament to the strong partnership between our two countries and our shared commitment to fostering economic development,” said Prime Minister Wong.

As the FTC evolves, it aims to provide SMEs in both countries with greater access to financial services, thereby promoting trade and economic collaboration. This initiative marks a significant step towards a more interconnected and transparent financial landscape in the region. The ease of data accessibility will enable participating financial institutions to make better credit risk assessments and facilitate greater availability of financing for SME trade between Singapore and Cambodia.

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