The International Monetary Fund says Cambodia’s young population compared with other regional countries will be a driving force for financial development and contribute to the emerging finance technology sector, or Fintech.
Deputy IMF managing director Mitsuhiro Furusawa made the remark to hundreds of students at the Royal University of Law and Economics yesterday. Furusawa, on a three-day visit to Cambodia, said the kingdom had a highly open economy and strong growth.
“Around 65 percent of the country’s population is 30 years of age or younger and Cambodia would benefit more, compared with other countries in Southeast Asia, if this youth bulge is harnessed well,” he said.
In a country with a youth bulge, as the young adults enter the working age, the country’s dependency ratio – that is, the ratio of the non-working age population to the working age population – will decline.
A World Bank report stated that if the increase in the number of working age individuals could be fully employed in productive activities, other things being equal, the level of average income per capita should increase as a result. “The youth bulge will then become a demographic dividend,” it stated.
Furusawa said that while it is important to increase the employability of young people themselves, it is also essential to facilitate dynamic structural change to create jobs for youth. “If you look at the world beyond Cambodia’s borders, you will see young people providing the spark of creativity to the knowledge economy. The young generation is bringing new ideas to old problems – designing apps and building new businesses,” he said.
Furusawa noted that financial inclusion was a key to the future of many Cambodians who strived to raise their living standards, but he was concerned that only 13 percent had bank accounts and most small businesses did not have access to financial services. He said the government understood the importance of financial inclusion to create economic opportunities and reduce poverty.
“Financial inclusion expands the possibilities of financial development. Together, they can increase growth and strengthen a country’s resilience in the face of powerful international economic forces,” he added.
Furusawa said the creative power of youth could be utilised to increase financial inclusion in the country. “One of the buzz-words of finance these days is Fintech. This can translate into many things, including high-tech online transactions in the advanced economies.”
He said that there were many areas of business where expansion of Fintech could have a significant impact across the country. This might include online lending and accounting services. “With a relatively young population of around 7 million internet users and 20 million mobile subscriptions, Cambodia offers great market potential,” he added.