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Home Industries in Cambodia Banking & Finance in Cambodia

Banking & Finance in Cambodia

Here is an overview of the banking and finance sector in Cambodia, the different types of banking institutions operating here and the various services available to corporate and domestic customers.

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Updated June 2020.

  • The official currency of Cambodia is the riel (KHR), which is pegged at a value of around 4,000 riel to the US dollar although this can fluctuate slightly.
  • Only USD notes are used, not coins. There are no riel coins either.
  • The US Dollars and the KHR are both accepted in Cambodia however and business and payments are complete with both currencies.
  • The NBC (National Bank of Cambodia) has been increasing its efforts to promote the local currency and de-dollarization. NBC claims this is to sustain the current economic expansion and increase the provision of financial services in Cambodia.
  • In 1998, the National Bank of Cambodia (NBC) was established.
  • Since then, Cambodia has seen many developments including the classification of banks, the requirement to issue annual reports, the establishment of a credit bureau, the creation of a stock market, the requirement of external auditors and increased minimum capital requirements and the push for digital payment platforms etc.
  • Cambodia’s banking system continues to align with international institutions.
  • The Ministry of Economics and Finance as well as the National Bank of Cambodia (NBC) regulate banks and banking services.
  • The Association of Banks in Cambodia (ABC) represents the banking sector to the Royal Government of Cambodia and the ASEAN Bankers Association. The ABC includes international, local and government-owned banks.
  • The International Monetary Fund (IMF) and World Bank also operate in Cambodia.
  • Cambodian banking is legislated by the Law on Banking and Financial Institutions (LBFI).
  • Cambodian MFIs saw healthy growth in 2018, with total assets expanding by 19.4 percent year-on-year to reach about $40 billion.
  • By 2019, there are 6.2 million deposit accounts in Cambodian commercial banks and MDIs and 2.6 million loan accounts in commercial banks and microfinance institutions (MFIs).
  • Fintech is growing in Cambodia as are digital payment and banking options.
  • The degree of competition within the Cambodian banking industry has grown dramatically as has the number of banks operating in the Kingdom.
  • In Cambodia there are more than 40 commercial banks, 14 specialised banks, 7 MDIs, 73 MFIs and 273 rural credit institutions by 2019.
  • For customers, this means the cost of credit is cheaper and there are more channels to do banking business through.
  • There are more ATMs and branches across Cambodia and a wider range of available products, such as insurance being sold through banks, banking apps, digital payment options etc.
  • The Association of Banks in Cambodia (ABC) released a Code of Banking Practice in February 2015: the document outlines a set of best practice industry standards encouraging financial institutions to be more open with their customers.
  • The Cambodian Code of Banking Practice is said to reflect the protection mechanism for financial service users and provides rights for financial service users to complain to banks or financial institutions on their services that they don’t like.
  • The move aims to foster confidence in the banking system and encourage a corporate culture of fair dealing.
  • Opening a bank account in Cambodia is relatively easy, provided you bring the correct documents.
  • These vary but generally include a copy of the applicant’s ID card or passport, proof of address and proof of income.
  • Corporate accounts require more documents, ranging from Certificate of Corporation and Memorandum and Article of Association to Certificate of Good Standing and Board Resolution.
  • Business customers can enjoy an additional range of services, such as payroll, letters of credit and foreign exchange.
  • An annual NBC reports that as Cambodia develops and maintains a good GDP growth rate, there is a favourable path for the banking sector’s continuous development.
  • The National Bank of Cambodia (NBC) has said commercial banking and finances have strong capital and liquidity.
  • By late 2019, the banking and microfinance headquarters and branches have increased up to 2,367 locations with 2,228 ATMs across Cambodia.
  • Cambodia’s largest commercial bank, ACLEDA Bank, listed on the country’s stock market (CSX) in May 2020.
  • Cambodia still operates on a predominantly cash-based system, although credit and debit cards are increasingly common and digital payment options have become more acceptable, especially in the urban areas and major cities.
  • Cards are accepted at most large hotels, restaurants and other retail outlets and tourist locations.
  • Payment apps have grown in the Kingdom and many retailers, F&B, accommodation, and other vendors accept payments by Cambodian banking apps and other digital payment gateway options.
  • There is the CSX in Cambodia, albeit limited, it does offer alternative investment opportunities.
  • Finding venture capital and private equity firms for finance in Cambodia, is not as easy as the industry remains fairly undeveloped but new VC (Venture Capital) firms and angel investors for industry 4.0 have entered the marketplace.
  • Banks will only usually lend to customers with collateral, such as land, pushing most Cambodian small and medium enterprises (SMEs) out of the picture.
  • There has been a recent growth in private equity firms setting up in Cambodia specifically targeting both foreign and local SMEs but there remains a gap in the market.
  • The microfinance sector (MFI) in Cambodia provides funding to smaller companies and is popular in Cambodia.
  • A Credit Bureau of Cambodia was launched in 2012 to promote transparency and help prevent credit risks associated with excessive lending to one borrower by different institutions.
  • The CBC provides commercial credit insight that helps Cambodian businesses reduce their costs, increase their revenues and reduce the risks associated with their credit portfolio.
  • CBC notification services allow users to track, analyse and take action quickly to reduce write-offs and identify additional revenue opportunities.
  • The monitoring service also helps safeguard Cambodian consumers and businesses from fraud using their investigation and identity authentication tools.
  • The CBC has already made a huge impact on the economy, with tens of thousands of reports being made daily and by the end of 2019, the Credit Bureau Cambodia has a total of 167 members including commercial banks, specialized banks, microfinance institutions, leasing companies and rural credit institutions.
  • In July 2019, the CDC launched the Commercial Credit Reporting System.
  • The Bureau is helping Cambodians to learn the benefits of good credit history, and the opposite—the damage of bad credit history.
  • The Cambodian credit bureau was launched in 2012 to promote transparency and help prevent credit risks associated with excessive lending to one borrower by different institutions.
  • The Cambodian credit bureau facilitates the development of new services that banks can offer their customers, and loans should steadily become more widely available without the requirement for borrowers to offer land or other items as security.
  • The Cambodian credit bureau credit reporting database has more than 6 million consumers by the end of 2019, representing more than 60% of Cambodia’s adult population. They generated over 5.3 million credit reports in Cambodia.
  • The Cambodian credit bureau is a partnership between the National Bank Cambodia (NBC), all banks and Microfinance Institutions (MFIs), and Veda Advantage, a leading global supplier of credit system technology.
  • Maintaining a central database of credit data enables banks and MFIs to share information relating to their customer repayment histories.
  • It also allows the Cambodian credit bureau to assist lenders in making accurate loan decisions.
  • The Cambodian Securities Exchange (CSX) opened in July 2011 as part of the implementation of the Financial Sector Development Strategy 2006-2015.
  • The exchange is regulated by the Securities and Exchange Commission but is owned by the Ministry of Economics and Finance which has a 55 per cent share and the Korean Stock Exchange which has the remaining 45 per cent share.
  • In order to trade, an investor must register with the SECC to receive an Investor’s ID then they may open a securities trading account or trade via a securities firm.
  • Foreign investors who have held a residency in Cambodia for at least 182 days are eligible to receive tax breaks on any trades.
  • For any conflicts that may arise between investors and securities firms, the SECC will arbitrate.
  • Any company wishing to list must satisfy SECC criteria. This includes three years of audited accounts, certain levels of financial security, to show profitability in previous years, a certain value of assets and certain future prospects. It is not a fast process—it takes months and substantial expense.
  • Exchange market confidence comes only with activity and diversity, and these factors are not independent—hence the new incentives from the SECC.
  • By May 2020, there are 12 listed firms in the Kingdom – 6 stock-listed and 6 corporate bond-listed. The 12 companies have raised a combined $240 million and the stock index increased more than 57 per cent in 2019 compared to 2018.

Banking Services in Cambodia

Commercial banks offer a range of services for individual and corporate customers in Cambodia.

  • Individual banking services include chequing and savings accounts, and foreign exchange services. 
  • Due to the competitive nature of the banking industry in Cambodia, there are also insurance, loan, mobile and online banking and a wider array of financial services being offered. 
  • Most Cambodian banks will offer credit cards, overdraft facilities and personal loans, although the services offered to foreigners and Cambodians may vary.
  • Credit card allowances usually have to be offset by cash funds held in a separate account, and loans will require collateral typically in the form of a land title.
  • Most banks will have SWIFT Code & BIC Codes for international transfers.
  • Several banks in Cambodia offer a payroll management service, saving customers time by allowing them to process payments directly to employees, creditors or other parties with a bank account to which funds can be sent.
  • Some banks have partnered with the growing number of financial apps to partner on these payment services.
  • The majority of the country’s main banks have launched online services to customers, offering various transactions, such as overseas and domestic money transfers and payroll payments, bill payments, phone top-ups and more.
  • Retail businesses can also take advantage of EPOS services whereby customers can pay for goods and services bills using credit and debit cards.
  • ABA Gateway is a popular service for eCommerce and merchant gateway payment options but there is an increasing number of choices.
  • Yes, mobile banking is available and increasing in popularity in Cambodia, with an increasing number of financial apps entering the market.
  • The solutions to enable mobile banking are ever more affordable and powerful. With 22 million SIM-card subscribers at the end of 2019 in Cambodia and around 16 million users of mobile and fixed internet, mobile banking will be a common feature and no longer a differentiator.
  • The young and easily educated population have adopted mobile banking and digital payment options more easily, and it’s still more popular in urban areas as opposed to the countryside (rural areas).
  • The charges incurred when setting up and operating a business bank account in Cambodia vary depending on the bank, the type of account being opened and features offered.
  • Interest charges vary, with standard transactions being capped at 18%.
  • Each bank has a fee schedule outlining all charges, which is available to customers.
  • As well as set-up fees, there can also be costs to run the account depending on the type being opened and other various factors, such as whether it has an overdraft facility.
  • Some accounts also carry a fee for dropping below the minimum balance or for credit cards.
  • Overdraft facilities are available at some Cambodia banks.
  • ATM machines in Cambodia can charge a hefty $4 or $5 fee for international cards but generally are free or nominal for bank cards locally.
  • Commercial banks offer various solutions to their customers’ borrowing requirements, in the forms of overdrafts and business loans.
  • Access to credit is usually secured by land or fixed cash deposits.
  • Here a land title is used as security against a loan, the bank will generally lend up to 50 to 60 per cent of the land’s assessed value (quick sale value).
  • If you want a $10,000 overdraft, you may need to set up a fixed deposit of the same amount, especially if you have no land to use as security.
  • Consequently, many small businesses face borrowing money from unlicensed lenders which is an expensive strategy.
  • Commercial banks and microfinance deposit-taking institutions (MDIs) loan portfolios amounted to nearly $24.5 billion in 2018.
  • In the Cambodian banking sector, most loans went to wholesale and retail, construction and real estate, agriculture, forestry and fisheries, and households.

Types of Banks in Cambodia

There are three types of banks in Cambodia – Specialized, Commercial and Micro Finance Institutions (MFIs). Here’s a quick overview of how these banks differ and how they might help you.

  • All banks, whether Specialized, Commercial or Micro Finance Institutions (MFIs), operate under the umbrella of the National Bank of Cambodia (NBC), which registers, licenses and regulates them.
  • The Ministry of Economy and Finance, as well as the National Bank of Cambodia (NBC), regulate banks and banking services. The Association of Banks in Cambodia (ABC) represents the banking sector to the Royal Government of Cambodia and the ASEAN Bankers Association. The International Monetary Fund (IMF) and the World Bank also operate in Cambodia. Banking is legislated primarily by the Law on Banking and Financial Institutions (LBFI).
  • In Cambodia, there are more than 40 commercial banks, 14 specialised banks, 7 MDIs, over 80 MFIs and 273 rural credit institutions by 2019.
  • A large number of domestic, regional and international banks means consumers and business owners are spoiled for choice in Cambodia.
  • However, the biggest banks in Cambodia are considered to be ACLEDA Bank Plc, Canadia Bank, ABA Bank, Foreign Trade Bank of Cambodia (FTB), Union Commercial Bank (UCB), J Trust Royal Bank (formerly ANZ Royal), Vattanac Bank, Maybank, BRED Bank etc.
  • A Specialised bank, according to the Law of Banking and Financial Institutions (LBFI), carries out one of the following three activities:
  1. The collection of deposits from the public that are considered “non-earmarked”;
  2. Credit operations such as leasing, commitments and;
  3. Guarantees under signature, all of which are deemed valuable considerations.
  • Commercial banks in Cambodia offer a broader range of services, catering to the requirements of individual and corporate customers.
  • Locally incorporated banks are required by the NBC and LBFI to have a minimum of $37.5m of capital or a shareholder with a rating of “investment grade” from an independent rating agency.
  • Commercial banks offer a wide range of services for individual and corporate customers.
  • To set up a bank account in Cambodia, make sure you bring the correct documents.
  • Individual services include chequing and savings accounts and foreign exchange services, credit cards, overdraft facilities and personal loans.
  • Increasingly, multinational banks are encouraging wealthy Khmers to invest in more liquid financial assets, as opposed to investing solely in land.
  • While these markets continue to grow, continuing education is needed from banks and financial consultants to alter conservatism towards the international finance market.
  • With ASEAN, more and more banks are attempting to offer region-wide services, allowing banking tools and funds to be accessible to business people across a number of ASEAN countries, if not all.
  • This drive is likewise ensuring banking codes of practice and ethics are being standardised across the region, benefiting Cambodian banking practice significantly.
  • There are over 80 MFIs in Cambodia by 2020.
  • MFIs service poor and low-income families, individuals and small institutions by providing micro-credit in the form of loans and other financial support.
  • The Cambodia Microfinance Association (CMA) is an NGO and professional association that aims to ensure the prosperity and sustainability of the microfinance sector in Cambodia
  • The largest MFIs use reliable credit assessment and risk mitigation tools (use of credit bureau, personal cash flow assessment, repayment ratios on disposable income and use of funds). However, smaller and unlicensed MFIs are not using them.
  • By 2020, Cambodia’s microfinance sector has provided approximately $7 billion in loans to more than two million clients. Nearly three million savers have savings accounts totalling almost $4 billion at 1,400 offices in Cambodia.
  • The NBC says there are 81 MFIs, of which seven are microfinance deposit-taking institutions.
  • The National Bank of Cambodia also reports there are 254 rural credit operators, 15 leasing companies and 16 payment service providers in 2020.

Money Matters

Here’s the heads-up on all you need to know about moving, managing and spending money in Cambodia.

  • Cambodia has its own currency (the riel) that comes in various denominations of paper bills ranging from 50 to 100000.
  • When the United Nations entered Cambodia in 1993 the economy became dollarized with the injection of a large amount of the US currency.
  • Restaurants, shops and hotels will generally accept larger US Dollar bills.
  • Damaged or torn dollar bills are rarely accepted but can be exchanged at the local money changers for a small fee or with NBC.
  • Cambodia still operates on a predominantly cash-based system but since around 2018 there is a rise in fintech and digital payment options.
  • Credit and debit cards are increasingly accepted at most hotels, restaurants and other retail outlets.
  • Cheques are used also, but sparingly.
  • Large transactions are generally conducted in dollars, with the riel the equivalent of cents as there are no coins in use in Cambodia.
  • In rural areas, however, the riel is still the dominant currency.
  • Many small shop owners and market vendors, tuk-tuks etc will not take bills larger than $20 for small purchases.
  • In 2020 the NBC is driving the push for the de-dollarization and by the end of the year will stop dealing with small USD notes such as $1, $2 and $5 bills.
  • An increasing number of Cambodians are switching from cash to cards such as Visa or Mastercard, UnionPay and other international credit card companies.
  • The criteria vary from bank to bank, with some banks offering credit cards to clients whose income is as little as $200 per month.
  • Some banks require customers to load credit cards with money to spend, while some are yet to issue credit cards to the market mainly due to the low usage of credit cards in the country.
  • Previously in Cambodia, all cards were savings secured, now real credit cards are becoming more and more common.
  • More Cambodians are travelling too and need international cards for purchases overseas.
  • Most commercial banks have ATMs in Cambodia and the number of ATMS is increasing. They can often be found clustered together at shopping malls, airports and other popular tourist attractions.
  • Many ATMs also offer international access for withdrawals at a fee, which varies considerably so it’s wise to shop around.
  • ATMs offer additional services including mobile phone top ups and payment utility bills.
  • Most commercial banks have ATMs in major centres and many offer increasingly wide rural coverage. 
  • Note that different banks offer different levels of ATM service – if fast cash is important to you, and you work countrywide, you best choose a bank with wide ATM coverage.
  • The Foreign Exchange Law 2007 states money can be freely and reliably transferred in and out of Cambodia through an authorized intermediary via a licensed bank.
  • Most Cambodian banks can transfer money internationally, though funds over a certain amount may take longer to process and require central bank approval.
  • Transfers from overseas accounts transit through a correspondent bank in the USA so can take a couple of days, and the correspondent bank may charge a processing fee, as may the originating bank for incoming transfers, or the destination bank in the case of outgoing payments.
  • Western Union and MoneyGram services are available but a number of new services are also offering these money exchange services, Wing, Xoom etc.
  • For relatively small amounts, ATM withdrawals from an international account can be a cost-effective method of transferring money into Cambodia, especially if you choose an ATM service where the local bank makes no charge.
  • The international online transfer options have also expanded in Cambodia, as well as the use of fintech and digital options.
  • With the rise in use of smartphones across Cambodia comes with it a need for banking institutions to adapt to consumer needs and digital payments are on the rise in Cambodia.
  • Mobile payment services in Cambodia include Wing and Pi Pay, are two the leading electronic money transfer systems – transfers are straightforward to make and cost a minimal amount to be transferred and usually free between accounts using the same companies app.
  • PayPal and Google checkout are not currently licensed to operate from Cambodia although some parts of PayPal do work, money can’t be withdrawn in Cambodia directly from a PayPal account.
  • Alipay and WeChat Pay, both popular Chinese e-wallet apps can also be used in Cambodia.
  • Currently, it can take between one to four working days to clear a cheque in Phnom Penh and longer in the provinces, but some banks can clear them on the same day and often ID is required to be presented at the bank.
  • Cheques made out in foreign currency can be deposited at Cambodian banks, provided those banks offer accounts in that particular currency, for example; US dollars, Vietnamese dong or Thai Baht.
  • Bounced cheques are not particularly prevalent in Cambodia, due to banks being well educated about taking due care when receiving cheques from third parties.
  • Also, a bounced check can mean jail time for the cheque writer!
  • There have been concerns from the international business community that Cambodia is vulnerable to money laundering, the Government said its tightened up its laws.
  • In March 2014, the Council of Ministers approved a sub-decree freezing assets of terrorist organisations and supporting institutions in compliance with UN resolutions.
  • In 2004, Cambodia joined the Asia/Pacific Group on Money Laundering, meaning the country must meet international standards to fight financial crime.
  • In 2007, a law on money laundering and terrorist financing was passed.
  • The Cambodia Financial Intelligence Unit (CAFIU) was established in the National Bank of Cambodia in 2008.
  • The CAFIU, the National Bank unit tasked with combating money laundering, is working very hard to de-list the country from any grey lists.
  • In February 2019, the Financial Action Task Force (FATF) added Cambodia to its watch list of countries with deficiencies in countering money laundering and the funding of terrorism.
  • In 2020, the E.U. has listed Cambodia as one of 12 “high-risk” countries with deficient anti-money laundering and counter-terrorism financing efforts.
  • The Ministry of Interior in Cambodia has been working on two draft laws – one on anti-money laundering and terrorism financing, and the other on combating proliferation financing to address the concerns.
  • There is a lack of equity or bond markets in the country meaning alternative investment must be sought through alternative avenues.
  • Banks will only usually look to proven character, the experience of repaying loans, and then cash flow, or profits from the business.
  • Most borrowers in Cambodia do not provide quality financial statements, thus they force the banks to lend with collateral, such as land, pushing most Cambodian SMEs out of the picture.
  • The microfinance sector provides funding to small companies and is proving a successful utility for small businesses. The sector saw a 44 per cent increase in loans in 2013.
  • Investors, business angels or venture capitalists are almost non-existent in Cambodia.
  • There are a few investment funds looking for mature projects, but for venture capital, there are only a few initiatives in the whole country.
  • There has been recent growth in private equity firms setting up in Cambodia, specifically targeting both foreign and local SMEs, but there still remains a gap in the middle of the market.
  • With the growth and development of financial technologies in Cambodia, the Cambodia Fintech Association (CFA) was set up in 2018.
  • Microinsurance companies are just one of the sectors said to benefit from the technology but other key industries to benefit from digital payments in Cambodia are health and fitness, retail, entertainment, and travel.
  • According to a study by Visa, a third of Cambodians expect that digital payments will continue to gain popularity compared to cash, while 54% say the economy can go fully cashless within the next seven years (by 2026).
  • Scan to Pay or QR payment solutions are already offered by many banks in Cambodia.
  • Banks in Cambodia have started to roll contactless cards from 2019-2020.
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