The role of technology in promoting financial inclusion will be the theme of the National Bank of Cambodia’s (NBC) Fourth Annual Macroeconomic Conference in November, as the central bank strives to ensure the delivery of formal financial products and services to all segments of the population irrespective of their economic situation.
Chea Serey, director general of the NBC, told Khmer Times that technology could play a significant part in closing gaps in financial inclusion and ensuring that all Cambodians have access to financial services at an affordable cost.
“As you may be aware financial technology is changing rapidly and we as the central bank have a crucial role to play to develop the financial sector,” said Chea Serey. “We wish to embrace new technology in the financial sector to better serve and better reach people throughout the country. At the same time, we would also like to understand more how new technology impacts the banking sector and the economy as a whole,” she added.
Chea Serey said the Fourth Annual Macroeconomic Conference would underscore the importance of embracing technology to ensure the financial inclusion of the country’s population. “Therefore we expect that the conference would provide us with more evidence in terms of our financial inclusion efforts,” she said. “We also do expect that the conference would allow us to understand more the challenges and opportunities for further promoting financial inclusion in the country.”
According to NBC’s 2016 data, 96 percent of Cambodia’s adult population have mobile phones and 48 percent have access to the internet. “These socio-demographic trends combined with recent developments in financial technology and mobile banking are all driving forces that could support initiatives to make banking services more affordable for the poor,” said the NBC.
According to an Asian Development Bank (ADB) study released in February only 13 percent of Cambodians have bank accounts and fewer than four percent save with a formal institution. “None of the mobile money service providers currently offers savings products, and none of the microfinance institutions [MFIs] has been able to develop a large network of agents to help mobilise micro-deposits,” stated the report.
According to the ADB, Cambodia’s gross domestic product could increase by more than 32 percent if the financial inclusion gap were closed. b“Digital enablement can be a powerful part of this solution. We estimate that corresponding digital applications and related regulatory initiatives could boost GDP by about six percent, produce more than $1.7 billion in additional electronic payment flows, lead to more than $2.5 billion in additional credit uptake, and mobilise more than $500 million in savings,” the ADB report pointed out.
The ADB report stated that digital applications and infrastructure can reduce the cost of mobilising micro deposits and promote financial inclusion and a stable supply side. “Reliance on high-cost agent networks and on branch and ATM infrastructure has discouraged MFIs from mobilising the deposits of their rural borrowers.
“A savings product based on a mobile wallet and serviced with a cash-in, cash-out agent infrastructure can help address this problem,” added the report.