Cambodia’s Digital Startup and Fintech Space Keeps Growing

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With over 300 active technology startups, operating at various stages of maturity in the Kingdom of Cambodia, we take a look at the burgeoning digital startup and fintech scene in Cambodia- with a focus on the organisations driving the education and facilitation of this sector.

The data above was made in a presentation by CAFT – Cambodian Association of Finance and Technology in March 2022, and they also stated that Fintech is the most active category in the digital space.

New Cambodia Startup and Fintech Associations

Since the start of the pandemic, Cambodia has been playing catchup in its digitalisation efforts but some of the progress has been made at breakneck speeds. The adoption of fintech, ride and food delivery apps, and the general adoption of e-payments and digital payments (QR code scans etc) – particularly in the urban areas – has been amazing to see.

The government is also pushing these efforts in combination with private partners – but the flurry of new tech hubs, associations, and organisations are sometimes confusing, especially for regional and international investors who are looking to navigate the domestic market.

Memorandum of Understandings are also being signed at a rapid pace but we try and highlight some of the key milestones and organisations below.

Cambodia Academy of Digital Technology (CADT)

Cambodia Academy of Digital Technology (CADT)

The National Institute of Posts, Telecommunications, Information, and Communication Technology (NIPTICT) announced its rebranding and expansion to the Cambodia Academy of Digital Technology (CADT) in November 2021.

The Cambodia Academy of Digital Technology has split into three subordinate institutes:

  1. Institute of Digital Technology
  2. Institute of Digital Governance
  3. Institute of Digital Research and Innovation.

CAFT – Cambodian Association of Finance and Technology

CAFT is the merger of two Cambodian technology associations – the Cambodia Fintech Association (CFA) and the Cambodia Association of Finance & Technology (CAFT) in 2020.

CAFT is primarily involved with raising awareness on financial inclusion and education through collaboration, advocacies, facilitation and teaching within the Cambodian FinTech
Community and its members.

In March 2022, the Cambodian Association and Finance and Technology (CAFT) held an MoU Signing with the Ministry of Post and Telecommunications (MPTC) to “strengthen CAFTs vision of collaboration by gathering and bringing together the diverse parts of the Cambodian finance and tech public and private community, advocating for a unified voice of the Cambodian finance and tech ecosystem, facilitating a great network where people in the Cambodian finance and tech industry connects, and to teach by learning from existing and past leaders to nurture the next generation of talent.”

They are also running a Financial Literacy Series in Phnom Penh – see more details on their Facebook.

CAFT members 2022
Image Credit: CAFT- “Fintech and Financial & Digital Inclusiveness in Cambodia”

Fintech and Financial & Digital Inclusiveness in Cambodia

In a forum on Post Covid Digital Development in Cambodia held in March 2022 in Phnom Penh, Tomos Pokorny (Board Director, Secretary-General of CAFT Community & Membership Committee Chair of CAFT) presented on “Fintech and Financial & Digital Inclusiveness in Cambodia” – below are some excerpts of his presentation with a focus on Cambodia’s digital economy:

One of the youngest demographics in the region

  • Cambodia has a population of approximately 16 million, with a median age of 25 years.

Rapidly growing financial services sector

  • With 2.65 million debit cards in 2019, a figure that has doubled in 5 years with sufficient growth to come, the fintech sector in Cambodia is growing.

High mobile connection

  • Cambodia has one of the highest mobile penetration rates in the world, with 20.8 million mobile connections, or 124% of the population.

High smartphone penetration

  • 10.7 million smartphones are connected to the internet in Cambodia. Data rates are one of the cheapest in the region at US$1 per 10GB. 4G and 3G coverage is 80% and 85% of the population, respectively.

Internet usage is highly social

  • By mid-2020, there are 10.8 million Facebook users in Cambodia.

Opportunity in MSME segment

  • Cambodia has approximately 500,000 micro, small and medium enterprises (MSMEs), of which 95% are informal unregistered businesses. Only a small number of businesses practice appropriate bookkeeping: micro (0.02%), small (3.89%), medium (24.11%)

The Digital & Inclusive Finance & Technology: From Fintech to Financial & Digital Inclusiveness report has other excellent information and we urge you to contact CAFT to get a copy.

Selected Fintech Ecosystem in Cambodia
Image Credit: CAFT – Digital & Inclusive Finance & Technology: From Fintech to Financial & Digital Inclusiveness

Cambodia Internet Startup Association (CISA)

The predominantly Chinese supported CISA was launched in March 2022, with the backing of the Ministry of Economy and Finance, Ministry of Post and Telecommunications, Huawei Cambodia, Zhengheng Group, and Cambodia Association of Finance and Technology (CAFT).

Jack Lee, is the co-founder of the CISA and founder of Smile Shop App and he said, “By leading more investment from China to the ecosystem of the Cambodian internet industry, we aim to empower local start-ups and SMEs [small- and medium-sized enterprises] and help them compete in regional and international market[s].”

The CISA was jointly established by Chinese leading players in the internet industry in Cambodia, including, among others:

  • Smile Shop
  • Gold Zone Media
  • 58cam.com
  • Compass Real Estate
  • CamHR
  • Focus Digital
CISA and CAFT MoU 2022
CISA and CAFT MoU 2022

CISA and CAFT MoU 2022

CISA and CAFT also announced a partnership to provide “high-quality” multilingual industry analysis reports, co-organise virtual and in-person activities and mark milestones in the Belt and Road Initiative (BRI).

CAFT Secretary-General Tomas Pokorny added: “Cambodia is relatively a small market in terms of population size, but this market has been growing vibrantly and still has huge potential to tap. New emerging trends will surface and present opportunities for the sector within the next decade.”

Pokorny said there are investment opportunities in Cambodia in areas such as:

  • digital banking
  • mobile payments
  • business-to-business (B2B) financial solutions
  • blockchain and decentralised financial applications

Financial Action Task Force (FATF) – Cambodia on “grey list”

Cambodia in 2022 remains on a list of nations under the Financial Action Task Force (FATF), also known as the “grey list”. The Kingdom remains on the list for “deficiencies in their efforts to counter money laundering, terrorist financing, and proliferation financing” it was announced in March 2022.

FATF said Cambodia had “failed to complete its action plan, which fully expired in January 2021.” They urge Cambodia to “swiftly demonstrate significant progress in completing its action plan by June 2022 or the FATF will consider next steps, which could include calling on its members and urging all jurisdictions to apply enhanced due diligence to business relations and transactions with Cambodia.”

Being on the grey list is one of the reasons believed to contribute to payment systems such as PayPal not being fully available in Cambodia, and it has created murky conditions surrounding other payment platforms and systems.

On March 12, 2022, the Khmer Times reported that the Minister of Economy and Finance was finding ways and means to ensure all conditions are met to get Cambodia removed from the grey list.

Cambodia Digital Economy

Physical Digital and Technology hubs in Cambodia

Techo Startup Centre – Phnom Penh

The Techo Startup Centre was launched in 2019 by the government to support young entrepreneurs and aid the Royal Cambodian Government’s plans to transform Cambodia into a digital economy.

National Incubation Centre of Cambodia

The establishment of the National Incubation Centre of Cambodia was announced in 2021. The NICC would support the focus on digital education and will offer training and mentoring to help prepare Cambodians for the digital age.

Cambodia Academy of Digital Technology (CADT)

(See above in the article)

Impact Hub

The long-running community hub offers “supportive programmes & incubations, workshops & events, mentorship, and valuable & resourceful networks”. Impact Hub hosts many tech pitch sessions and startup programs and utilises local mentors.

You can read more about the potential of NFTs in Cambodia.

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