Cambodian Banking News

Withdrawals top hundreds of millions

2013-11-17T03:31:00.003-08:00

More than $600 million flooded out of Cambodia’s entire banking system during the third quarter of this year, as fears of post-election chaos set off panic and mass withdrawals, new figures from the National Bank of Cambodia (NBC) reveal.

The figures, obtained yesterday, were the first system-wide indicators of how the banking sector fared since the July 28 poll awarded the election to the ruling Cambodian People’s Party. The results triggered allegations of foul play from the opposition, creating a tense stand-off marked by protests and go-nowhere negotiations.

National Bank of Cambodia Director General Chea Serey said yesterday that the sharp decline was expected every five years due to elections, but that this time around, it “probably” was the largest dip ever.

“When there are elections there is a bit of uncertainty,” she said. “After all, this is a young economy, there have only been five elections,” she added, referring back to the UN-backed poll in 1993.

Tensions have been high since disputed voting results came in months ago. Though largely peaceful, subsequent demonstrations by the Cambodia National Rescue Party were met with a heavy security presence in the city, and one man was shot and killed after authorities descended on a bridge to quell protestors in September.

The climate of fear extended to the financial sector, where many mistrusted the level of security maintained at banks. Deposits fell from $7.2 billion at the end of June 2013 to $6.6 billion at the end of September.

That means that account holders withdrew close to $630 million, or 8.7 per cent, of the total number of deposits held in Cambodia’s 34 commercially registered banks.

While large, the decrease did not astound observers, who have seen the same during the past several months with other financial institutions.

Acleda, the country’s largest bank, reported last month that customers withdrew $200 million in the period around and following the election.

Confident that customers would return, Acleda president and CEO In Channy said at the time that the bank had regained close to $186.5 million in little over a week after the quarter ended.

Industry leaders and economists echoed Channy’s positive outlook yesterday, pointing out that Cambodia’s banking system could even build trust with consumers by showing that it can weather a storm.

Charles Van, president of the Association of Banks in Cambodia, said the industry had made it through the withdrawal frenzy, and he did not expect any lingering effects.

“It always happens in the country during the election process. The money is withdrawn but then over a period of time the money comes back.”

Independent economist Chan Sophal said he had not seen any severe impact on other parts of the economy, as “the banking sector was able to absorb the shock”, he said. “It could even increase confidence in the future because of this precedent.”

Serey at the NBC agreed that there were no clear economic ripples bubbling, but that Cambodia’s economy always needed to be monitored.

“As regulators, as a central bank we would always be on the watch, whatever the situation. If it is not something that happens here it is something that happens outside that can spill over on us,” she said.

Not all believed the economy had turned the corner. Kang Chandararot, director of the Cambodia Institute of Development Study, said that as long as the political stand-off continues (the opposition is still boycotting parliament, the ruling party isn’t giving in on their demands) the cost of investing in the country could increase.

“The longer it holds, the worse the economy,” he said.

Source: http://www.phnompenhpost.com/business/withdrawals-top-hundreds-millions

Japan’s Orix to buy stake in Acleda

2013-11-17T03:29:00.004-08:00

Japan-based financial services provider Orix Corporation will acquire a little more than six per cent of Cambodia’s largest bank, Acleda, the bank’s president and CEO confirmed yesterday.

The deal, representing the largest investment by a Japanese company in the local banking sector, has already been approved by the National Bank of Cambodia, Acleda president In Channy said, adding that “the process is almost complete”.

Channy described Orix, a leading leasing company in Japan, as “a strategic investor that can bring expertise”.

Orix is buying the stake because of Acleda’s capacity, Channy said, such as the bank’s subsidiaries in the country and its presence in Laos and in Myanmar.

He declined to give further details such as the dollar size of the investment or if Orix would take over a specific function at the bank. The official announcement is due today.

A representative at Orix’s investor relations department declined to comment yesterday.

“From our side, we haven’t really released anything on this matter yet,” he said.

Orix business interests extend into a number of sectors, including real estate, insurance and banking. It also owns a professional baseball team in Japan, the Orix Buffalos, according to a Bloomberg profile.

Established in 1964 and headquartered in Tokyo, Orix is listed on the Tokyo Stock Exchange, the Osaka Securities Exchange as well as the New York Stock Exchange. For the six months ended September 30, Orix made net income of 80.4 billion yen ($13.2 billion), a 34 per cent increase year on year representing increased profits for four consecutive quarters.

The deal also represents the first investment in Cambodia by a major Japanese financial institution, according to a report in the Wall Street Journal yesterday, which valued the stake at around $55 million and also detailed four similar moves Orix made recently, including a June purchase of 20 per cent of Philippine power-generation company Global Business Power Corporation.

While its status as a financial group makes it stand out, Orix is not the only Japanese investor throwing millions into Cambodia. According to statistics from the Council for the Development of Cambodia, Japan was the third largest investor in 2012, contributing a total of about $212.3 million.

In 2008, Maruhan Japan Bank Plc became the first fully licensed Japanese-owned bank to open in Cambodia. In July of this year, Mizuho Bank became the third Japanese mega-bank to open a representative office, following Tokyo-Mitsubishi UFJ Bank and Sumitomo Mitsui Banking Corporation.

Finances and banking, however, represent only a small part of overall Japanese investment. On Sothearos Boulevard, construction is well under way for the Japanese-funded Aeon shopping mall, a $205 million project, which should be finished by mid-2014.

Embassy of Japan counselor Takayoshi Kuromiya said yesterday that investors are generally attracted to lower wage costs in Cambodia and its geographical location.

“Cambodia is very close to Thailand and Vietnam, so we can deliver some of the products to Bangkok and Ho Chi Minh and Hanoi very easy,” he said.

However, he said that Japanese companies, many of which invest in manufacturing, still have stability and safety concerns, alluding to discord after the national elections in July.

“So we hope that the Cambodian government will make a favorable environment for Japanese companies and improve political stability.”

Source: http://www.phnompenhpost.com/business/japan%E2%80%99s-orix-buy-stake-acleda

Acleda debuts its credit card

2013-11-17T03:28:00.002-08:00

ACLEDA officially launched its first credit card on Friday as Cambodia’s largest bank eyes the country’s rising middle income bracket, president and CEO In Channy said yesterday.

“This is the right time for us to start this Visa credit card product. By 2020, Cambodia will change from the least developing country to a lower middle income country,” he said.

For ACLEDA, it’s a step up from the ATM and debit cards the bank already issues.

By the end of this year, Channy said ACLEDA hopes to have 700 customers using the product, which is still a fraction of the more than 15,000 users of credit cards in the country.

Channy, however, expects a rapid demand for plastic over the next 10 years, and said the ACLEDA card will be more accessible than what’s available in Cambodia.

“We can go with any client whose income is as much as $200,” he added, referring to conditions for obtaining one of the cards.

Channy is not alone in his assessment of potential growth. Grant Knuckey, chief executive officer of ANZ Royal Bank, said that to describe the credit card market as “nascent” understates Cambodia’s “tiny” number of holders.

“The potential for credit cards is very high in this market given the low current base, the growing wealth of individuals, and the increasing consumerism evident,” he said.

ANZ Royal, according to Knuckey, has the greatest market share of credit card users in the country, with about 25 per cent of the total. Given the risks involved in a developing economy, however, the criteria for ANZ card holders are set high.

“Our own credit card business is very much targeted at our focus retail client segments, we do not target anyone who would not have a broader ANZ Royal relationship across other products,” he said.

Considering the 20 Visa-licensed banks in Cambodia including ACLEDA, Lorijon Bacchi, Visa country manager in Vietnam, Cambodia and Laos, said that the greater prevalence of credit cards can improve transaction efficiency, and “when used responsibly”, can provide a secure payment tool.

“As Cambodia’s economy grows, Visa is committed to working with our local banking partners to help Cambodian cardholders to understand how credit cards work so they can make informed decisions on how best to manage their money.”

National Bank of Cambodia director general Chea Serey said that with greater confidence in the banking sector, buyers and sellers are allowing more room for household consumer credit.

“But excessive spending is also a risk to be watched carefully,” said Serey, who added that “bad credit underwriting affects the bank balance sheet and profitability and can ultimately have repercussions on depositors’ money, the financial system and ultimately the whole economy”.

Source: http://www.phnompenhpost.com/business/acleda-debuts-its-credit-card

Acleda sees record decline

2013-10-14T23:31:00.000-07:00

For the first time in its history, Acleda, Cambodia’s largest commercial bank, has recorded a quarterly decline in customer deposits as well as a decrease in loans.

Nearly $200 million was shaved off, according to official third-quarter results released on Friday, as customers withdrew their savings amid post-election tension. Acleda president and CEO In Channy confirmed the figures yesterday.

Deposits dipped sharply from $1.46 billion at the end of June to $1.26 billion at the end of September.

Channy attributed the shortfall to a political standoff unnerving many customers who fear their savings were not secure in the bank. Cambodia National Rescue Party lawmakers-elect are still refusing to take their 55 parliamentary seats earned in July’s election, citing allegations of voter fraud.

“This was the first time. Normally we grow exponentially,” Channy said.

As unprecedented as the fall is, Channy asserted that by last Friday, Acleda was surging back to normal levels and had regained close to $186.5 million in deposits, reflecting a fast returning confidence in the bank.

The 11-day turnaround usually takes over three months of normal growth to match.

“The profit after tax remains the same; we adjusted the lending rate and retained strong profits in the third quarter,” he said.

In another first at Acleda, loans contracted during the third quarter.

Falling deposits at Acleda meant that credit was also harder to come by. Rates were increased to deter “bigger loans”, he said.

Acleda recorded a drop of $2.8 million in consumer lending.

Local businessman and former ANZ Royal Bank CEO Stephen Higgins views the Acleda results as a gauge for a much larger economic problem brought on by political issues.

“Acleda is a very large bank, and touches just about every part of the economy, so what happens at Acleda is going to be a pretty good indicator for what is happening with the broader economy,” he said.

Following suggestive anecdotal evidence of post-election economic woes, the mass withdrawal at Acleda is one of the first concrete indicators to emerge, and the consequences could still be playing out.

For one thing, Higgins said the Acleda results demonstrate an unwillingness among Cambodians to part with cash, which is “really hurting” small and medium-size businesses.

Cambodian Economic Association president Srey Chanty is still concerned with economic factors after the election. Chanty said credit supply has been unable to meet demand, forcing the cost of borrowing to increase.

“The impact is mainly on the farmers and for those who want to borrow from the bank, to invest in their activity or to pay for their operations,” he said, adding that the problem could worsen if the situation continues.

As deposits rapidly flow back, however, Acleda’s Channy is confident that financial problems are stabilising, and he doesn’t expect broader ripples in the economy.

A recent spate of economic forecasts back up the positive outlook.

The International Monetary Fund raised its 2013 growth prediction for Cambodia to seven per cent last week, from 6.7 per cent in April. In a recent update, the Asian Development Bank (ADB) maintained its 7.2 prediction. For the moment, it seems, both agencies share Acleda’s confidence.

“As for the impact of the elections, we decided that we did not have enough concrete information or indications to make any sensible judgments,” said ADB senior country economist Peter Brimble.

Brimble added that trends remain positive, but the situation will be reviewed again in the first quarter of 2014 ahead of the ADB’s next forecast.

Grant Knuckey, CEO of ANZ Royal Bank, says deposits are flowing back into the banking system, and he doesn’t anticipate any more long-term effects.

Credit growth, however, will be lower in 2013 relative to 2012, according to Knuckey, “as banks have become more conscious of the need to manage liquidity.”

“This is actually a healthy thing, as credit growth was beginning to become excessive relative to economic growth and the narrow borrower base,” he said.

The National Bank of Cambodia, which records sector-wide deposit information, could not be reached for comment yesterday.

Source: http://www.phnompenhpost.com/business/acleda-sees-record-decline

Cambodia Post Bank enters crowded sector

2013-09-29T17:27:00.002-07:00

Cambodia Post Bank Plc opened its doors yesterday, becoming the newest player in an increasingly crowded industry.

Toch Chaochek, the bank’s chief executive officer, said the bank, which is partially owned by the country’s postal service, will target clients in micro and small to medium-sized enterprises (SMEs).

“We have a licence to operate as a commercial bank, but we are mainly concentrating on providing something similar to a microfinance institution,” Chaochek said. He added that loans range from as little as $300 to as much as $250,000.

The initial paid-up capital of $38 million is a joint investment. State-owned enterprise Cambodia Post is the smallest stakeholder, with five per cent. Canadia Bank Plc Canadia Investment Holding has 50 per cent, and Fullerton Financial Holdings, a subsidiary of Singapore corporation Temasek Holdings, owns a 45 per cent piece.

Gan Chee Yen, chief executive officer of Fullerton Financial, said his company has experience serving the micro and SME segment across Asia, and in comparison, access to funds here is limited.

“We are committed to sharing our capacities and building local skill that will help the financial services sector in Cambodia well into the future.”

Cambodia’s economic growth rate is forecast at seven per cent this year. The country has 34 licensed commercial banks, seven specialised banks and 37 microfinance institutions, according to the latest report from the central bank. In Channy, CEO of ACLEDA Bank, said that there’s still room for growth in the sector. Channy said the majority of banks are clustered in Phnom Penh, but demand for small loans in the provinces is high.

“Many SME owners still demand good financial services,” Channy said. “If they [banks] have good human resources, infrastructure, and enough capital, they still have a promising opportunity to grow.”

Source: http://www.phnompenhpost.com/business/cambodia-post-bank-enters-crowded-sector

ACLEDA bank profiting in Myanmar

2013-09-25T00:49:00.002-07:00

Six months after ACLEDA bank launched a microfinance institution (MFI) in Myanmar, the number of clients has outpaced predictions by more than fourfold as Cambodia’s biggest bank cashes in on growing loan demand in a developing industry.

In Channy, president and CEO of ACLEDA, said yesterday that at the end of August, ACLEDA MFI Myanmar counted 2,782 active borrowing customers, much higher than an expected amount of roughly 600.
The MFI has $251,000 in outstanding loans, Channy said.

“The loan demand over there is high, it’s very high,” he said, adding that loans are given to micro businesses and are mostly used for trade, such as the buying and selling of groceries or clothes.

ACLEDA is not the only bank seizing the opportunity to do business in a country emerging from decades of military rule. Last year, the Cambodian branch of Japanese-owned Maruhan Bank opened a representative office in Myanmar. A few months ago, in June, Australia and New Zealand Banking Group Ltd did the same.

Representative offices are often the way that banks test the waters in emerging markets before establishing a branch.

In September of last year, MasterCard was the first international payments network to issue a licence to a Myanmar bank, setting the stage for cards to be accepted in the cash-dominated economy.

Bun Mony, president of the Cambodia Microfinance Association, said yesterday that he doesn’t expect other Cambodian MFIs to follow ACLEDA’s lead and head over to Myanmar, “because most of them, they focus more on the Cambodian market.”

“They are starting to develop. But for me I see one constraint of the policy.”

According to Mony, in order to protect the poor, the Myanmar government caps the interest rate at which MFIs can give out loans. He said that MFI funds are from investors, so if MFIs can’t profit, interest will dry up.

“Even though there are MFIs already [in Myanmar], those MFIs cannot grow because there is no investment,” he said.

Bloomberg reported earlier this month that Tokyo Stock Exchange Group Inc and Daiwa Securities Group Inc were chosen last year to help Myanmar set up a stock exchange.

However, due to delays in setting the legal framework in place, Myanmar is running behind schedule for a 2015 launch.

Source: http://www.phnompenhpost.com/business/acleda-bank-profiting-myanmar

Banking course to launch soon

2013-09-25T00:48:00.002-07:00

The Institute of Bankers Malaysia (IBBM) launched a training course in Cambodia yesterday aimed at developing standardised skills in the country’s rising banking sector.

Tay Kay Luan, chief executive officer of IBBM, said the course, which offers certification in the global Chartered Bankers system, will bring trainees into a network of successful professionals.

“We want to improve and increase the learning outcome of the student,” Luan said. “It is important that whatever we teach them, they can apply in the workplace and at the same time can improve the performance of the bank.”

IBBM will work with the Cambodian Institute of Banking, a group owned by the Association of Banks in Cambodia, to develop the curriculum. Students have to pass three levels, comprising nine modules.

Modules in the first level cost $250, with prices increasing in the second and final level.

A launch date for classes has not been set.

Source: http://www.phnompenhpost.com/business/banking-course-launch-soon

Cambodia’s banking sector stable despite ongoing political row over poll results

2013-08-26T21:30:00.000-07:00

Cambodia’s banking sector remains stable with steady growth in business operations even though political tension between the ruling party and the opposition party over election results is still going on, Central Bank’s chief said Friday. “The banking sector has been developing soundly, in terms of scope, operational scale and products,”Chea Chanto, governor of the National Bank of Cambodia (NBC), said during the inauguration of a Malaysia’s Hong Leong Bank-Cambodia. …

The Southeast Asian nation has 34 commercial banks serving about 1.6 million borrowers and 1.9 million depositors, according to the NBC.

Meanwhile, Chea Chanto expressed his optimism that the country’ s economy would grow by 7.6 percent in 2013, driven by strong growth of garment exports, agriculture, tourism and construction. “The strong growth is a result of macroeconomic stability,”the governor said, adding that inflation was expected at a manageable level of 5 percent. …

http://news.xinhuanet.com/english/business/2013-08/23/c_132657163.htm

After poll, Deposits at Microfinance Institutions Down

2013-08-26T19:02:00.001-07:00

Saving deposits at microfinance institutions (MFIs) this month decreased slightly from the average monthly amount because of a rise in withdrawals, industry officials said.

Bun Mony, president of the Cambodia Microfinance Association (CMA), and the general manager at MFI Sathapana Limited, said many people have come to take out funds during the first two weeks of the month, and he speculates that the withdrawals could be tied to unease over the post-election deadlock and fears of instability.

“Loan disbursement is growing as usual, but we do not have a growing number in saving deposits,” Mony said on Tuesday. “Customer confidence is just getting better, and the deposits should be back to normal next month.”

Four of the biggest microfinance institutions licensed to take deposits said this week that saving deposits fell this month compared to the monthly average.

Sim Senacheert, chief executive officer of PRASAC microfinance, Cambodia’s leading MFI in both savings and loans, said PRASAC holds, on average, $7 million in saving deposits, and that number should drop to less than $5 million in August.

“Earlier, we have an average monthly growth rate at nearly 20 per cent, but the growth rate in the first two weeks this month is much lower,” Senacheert said.

Deposit and loan disbursement data from the CMA, which is updated quarterly, revealed that total saving deposits made at MFIs reached $378 million by the end of June this year, up from some $224 million at the end of December.

Chea Phalarin, the chief executive officer of Amret Microfinance, said he has only seen a slight decrease in total deposits for the month so far.

“Some people might worry on the political situation after the election, and that is why they take out money,” Phalarin said.

“But, our performance in general is stable and nothing to be seriously worried about.”

Source: http://www.phnompenhpost.com/business/after-poll-deposits-microfinance-institutions-down

Sathapana borrows $15m for micro loans

2013-08-19T20:54:00.002-07:00

Cambodian microfinance institution (MFI) Sathapana Limited will receive $15 million in loans to provide additional support to small- and medium-size enterprises (SMEs), which make up the vast majority of the country’s businesses.

The loan comes courtesy of German Investment and Development Company DEG, a subsidiary of Germany development bank KfW.

Speaking during the signing ceremony at the Raffles Hotel le Royal in Phnom Penh yesterday, Sathapana CEO Bun Mony said the loan has to be paid back within seven years, at an interest rate of about 6 per cent.

The money helps Sathapana expand into the SME sector by providing long-term financing, with a maximum borrowing period of up to 48 months.

“This agreement also reflects that Sathapana’s reputation and image have been improving due to outstanding performance and effective operational management, meeting high international standards,” Mony said.

As of August 1, Sathapana registered outstanding loans of $143 million in the hands of 72,600 borrowers. The number of deposit customers, or those who use the MFI like a savings account, reached 54,334. Taken together, clients stowed away $70 million.

“Sathapana Limited plans to have 175,000 clients with a total loan portfolio of $500 million in the next five years. It hopes to reach out to 250,000 clients with a total loan portfolio of $1 billion in the next 10 years,” Mony said.

The MFI operates in all provinces and cities in Cambodia, has 101 offices and employs about 2,000 people.

KfW has been implementing financial assistance projects in Cambodia since the mid-1990s, according to the German Embassy in Phnom Penh.

Herbert Jaeger, senior investment manager of the DEG Representative Office in Bangkok, said DEG stepped into the business in Cambodia more than 10 years ago. Last year, DEG provided a $15 million loan to Cambodia’s largest MFI, PRASAC.

“DEG has [supported] the private sector in Cambodia with about $100 million and we will extend further,” he said yesterday, adding: “We will add our finances to other MFIs in the future.”

Source: http://www.phnompenhpost.com/business/sathapana-borrows-15m-micro-loans

Promotions few in financial sector

2013-08-08T23:28:00.003-07:00

In late 2009, two months after graduating with a degree in economics, Heng Piseth found a job as a credit officer with a microfinance institution in Kampong Thom province.

Nearly four years later, his responsibilities at the office are the same as when Piseth started: loan disbursement, loan collection and following up with clients whose payments are due.

“I see that the room to grow into a higher position gets narrower and narrower,” Piseth said. “The competition is tough.”

The story reflects a larger trend confronting young Cambodians entering the financial sector’s job market. While thousands graduate university and move into entry-level jobs, the upper rungs are becoming increasingly scarce.

There’s little room for the ambitious to emerge from a crowded playing field.

Grant Knuckey, CEO of ANZ Royal Bank, said the Cambodian banking sector has a significant “talent deficit”. He said there is simply not the capacity for the industry to absorb the drove of inexperienced employees and train them adequately.

“The market is in fact growing significantly, but the ability for individuals to get promoted may be more difficult than in the past because the competition is more intense as more people join the industry,” he said.

“This is a good thing for the banking sector, because it raises the overall calibre of employees. At ANZ Royal we always promote on merit rather than length of service, and it seems the industry overall is headed more in that direction.”

The dim promotion prospects aren’t scaring job hunters. According to Knuckey, some 4,000 new hires moved into the financial sector in 2012, and more than 1,500 of those chose to work in commercial banking.

As a result of growth, demand for junior staff is increasing. Virac Socheata, business operations manager at human resources consultant Great Alliance, said the numbers are going up by 30 to 35 per cent year on year.

This wasn’t always the case.

“In 2005, the potential staff was limited and opportunities large,” Socheata said. Now, however, “it is very challenging to catch a chance at middle-management or higher”.

According to a recent report from the Cambodian Microfinance Association, the number of employees who work at the 35 microfinance institutions and Cambodia’s biggest commercial bank, Acleda, was about 23,000 at the end of June, a 6.6 per cent increase from an estimated 21,700 at the end of December 2012.

Sim Senacheert, chief executive officer at Prasac, said it is hard to distinguish among fresh graduates coming out of university because skill levels are similar. At Prasac, applicants must go through a rigorous recruitment process, including a screening, writing test, interview and reference checks.

“There are many newly graduated students looking for jobs at the moment. It is a bit hard to recruit staff who have banking experience for high positions.” Senacheert said.

For openings, Prasac receives a deluge of applications, not all up to standard.

“I think that to get jobs, students should focus on the quality of their knowledge instead of just focusing on having the degree,” he added.

Source: http://www.phnompenhpost.com/business/promotions-few-financial-sector

Election jitters result in run on ATMs

2013-08-08T23:25:00.003-07:00

Acleda Bank users withdrew an estimated $4 million in cash from ATMs on Sunday evening as tensions mounted over the results of the national election and triggered fears of instability, an analyst with ratings agency Standard & Poor’s said.

The volume, confirmed by Acleda, was two to three times higher than the average daily amount.

“Our understanding was that it was a knee-jerk reaction on Sunday evening, where people were withdrawing cash and stocking up on food in preparation for unrest and disruption of services,” Ivan Tan, a credit analyst with S&P in Singapore, said in an email yesterday. “Those fears were unfounded and it appears that the situation has stabilised for the banking sector for now.”

The ratings agency released a statement on July 30, two days after the election, saying it was holding Acleda’s credit rating at B, or stable, because the withdrawals were limited compared to the bank’s liquid assets.

Acleda, with 170 ATMs across the country, is Cambodia’s biggest bank, and was therefore the most impacted, S&P said in the statement. As of June 30, the bank held $1.5 billion in deposits.

S&P did not have figures for other banks in Cambodia as it only rates Acleda.

Most of the withdrawals took place in Phnom Penh, which was the scene of isolated rioting and an increased police presence on Sunday. Long lines formed at ATMs, and prices for basic food staples were jacked up.

While the atmosphere has calmed, the outlook is uncertain. According to early results, the ruling Cambodian People’s Party won by a narrow margin, and though the opposition Cambodia National Rescue Party won a stunning 55 seats in parliament, up from 29, its leaders are calling for an investigation into alleged irregularities on voting day.

The eventual findings of the probe, which was welcomed by Prime Minister Hun Sen during his first post-election appearance on Wednesday, won’t be known in the near term.

The ratings agency said that “in a less-likely scenario of sustained withdrawals due to continuing protests, the bank may have to rely on the central bank for liquidity”.

Acleda president In Channy said his officials were concerned, but prepared, pointing out that when withdrawals jumped, ATMs weren’t emptied out.

“Most of the customers, they withdrew only the small denomination,” he said. “It wasn’t empty of cash, we had plenty of riel, because they don’t demand the riel then. And we had plenty of $100 dollar bills.”

Source: http://www.phnompenhpost.com/business/election-jitters-result-run-atms

MFI loans, deposits continue to increase

2013-08-08T23:21:00.001-07:00

Both outstanding loans and savings deposits in 35 microfinance institutions (MFIs) continued to grow from January through to June this year, according to the latest report from the Cambodia Microfinance Association (CMA).

By the end of the first half of this year, total loans from MFIs reached $1.08 billion, up from $808 million at the end of 2012. Deposits in the seven microfinance institutions licensed to take them grew to $377.7 million, up from $224.7 million at the end of the last year.

Experts in the microfinance sector said the rise was due to continued business activity in rural areas and a broadening awareness of formal financial services.

CMA president Bun Mony, who is also the general manager at Sathapana Limited, said loans for small businesses and farmers also contributed significantly.

“The economic situation in rural areas continued on a stable path, and the demand for capital to invest grew. We were very surprised with the high growth rates,” he said.

According to a report from CMA, most borrowers from the institutions are not running into trouble meeting payments. Non-performing loans, or those that are at risk of not being paid back, amounted to $4 million, only 3 per cent of the total.

Out of the total $1.08 billion in outstanding loans, the report shows that the microfinance institution Prasac provided $301 million, Amret microfinance $174 million and $139 million came from Sathapana Limited. Hathakasekar Limited lent $113 million of the total, and AMK, the fifth largest institution, put out $69 million.

Din Virak, founder and director of the consultancy Capital Institute, said more savings at MFIs will enable them to provide more loans.

“If the trend keeps up, it will contribute to lower interest rates,” he said.

Sim Senacheat, chief executive officer of Prasac, said deposits jumped during the first half of 2013 because of stronger customer confidence in microfinance and modernised banking services like ATMs.

“Former customers increased the size of their loans more than before, and we’re getting more new customers than we used to,” he said.

Source: http://www.phnompenhpost.com/business/mfi-loans-deposits-continue-increase

ACLEDA official voices calm over election withdrawals

2013-08-08T23:20:00.000-07:00

The chief financial officer of ACLEDA Bank tonight acknowledged long lines were forming at its ATMs amid concerns over the election.

Chhay Soeun, who is also executive vice president of ACLEDA Bank Plc, said he was aware of the mounting queues at ACLEDA ATMs, though he said that there is no cause for concern.

“Security is not a problem. We are sure there will be no violations. Maybe [withdrawals] will still continue after tonight, but tomorrow we will talk to the National Bank of Cambodia as well as the Association of Banks of Cambodia."

Chhay added that ACLEDA Ban was prepared for such an eventuality, having contacted foreign lenders before today’s elections for financial support.

In the meantime, there is no guarantee that ACLEDA customers will have access to funds, as company policy is to refill ATMs during daytime hours only.

“We have enough money to refill all ATMs, but we will need more support if withdrawals continue,” Chhay said.

On whether he believes the withdrawals, and the civil unrest, will continue, Chhay said: “We think that the situation will happen for one to three days only.”

Source: http://www.phnompenhpost.com/business/acleda-official-voices-calm-over-election-withdrawals

Canadia Bank CEO articulates strategy of ‘truly local’expansion

2013-07-11T21:33:00.002-07:00

Michael Lor was appointed the CEO of Canadia Bank Plc, Cambodia, in July 2011. In leading the Bank’s senior management team, he is responsible to key areas of competitive business transformation including business expansion, process enhancements and optimisation, customer experience, risk management, corporate governance and complaints and leadership development.
Lor sat down with the Post’s Moeun Nhean for an interview.

Our readers want to understand Canadia Bank’s secret for success. Can you give us an overview of Cambodia’s banking industry today where 35 banks serve a population of more than 14 million people?

Canadia Bank is leveraging our strong pedigree and reliable history to transform and build a comprehensive financial services provider. For over 20 years the bank has grown steadily and expects continued steady and sustainable growth for years to come. Equal importance is placed on growing revenue and profits as well as on strong liquidity and capital position.

Canadia Bank recognises that to remain the leading bank in Cambodia, it is imperative that the bank respond appropriately and decisively to new market conditions and realities. Much of this has entailed leveraging our strong brand and experienced management to embark on ambitions but realistic goals. We devote great attention and resources to ensure that we streamline operations and become more efficient in how we conduct business with and for our customers.

Today, Canadia Bank remains the safest bank in Cambodia. Local and global customers and banking partners are assured that Canadia Bank balances growth aspirations with a strong and stable balance sheet.

Despite significant growth ratios, we have maintained our loans to deposit ratio conservatively at 69 per cent and our regulatory liquidity ratio at 17.3 per cent. Our total capital adequacy radio remains among the highest in the industry at 21 per cent and our solid total shareholder’s equity position of US $204 million, which is comfortably above the minimum regulatory requirement, augurs well for the continued business expansion of Canadia Bank in the near future.

Canadia Bank is truly a local Cambodian Bank with its growth, culture and existence completely entwined with the Cambodian people and economy; simply put,” we are here to stay”.

How many branch offices does Canadian Bank have nationwide?
By the middle of this year our distribution network will comprise 48 branches and more than 80 ATMS located nationwide across Cambodia. Our aspiration is to be in every single province where our customers are located. Very shortly, we would also be announcing the launch of our internet banking services for both our individual and corporate customers.

What is Canadia Bank’s recent financial performance?
Canadia Bank Plc reported financial performance for fiscal year ending 31 December 2012, with growth of total deposits by 22 per cent to US$1.28 billion, and also grew loans book by almost 20 per cent to US$880 million. Amidst very competitive environment, Canadia Bank grew loan its portfolio in a disciplined manner placing priority on credit quality. With improved efficiency, total operating income jumped more than 35 per cent compared to 2011, to reach US$70 million. The Bank’s total assets continue its upward path and grew by 23 per cent to reach almost US$1.56 billion.

The year 2012 resulted in impressive financial gains and standing. Our total income increased by 35 per cent. A total of $70 million, and driven by net interest income, accounting for 52 per cent, and net fee income, accounting for 25 per cent; Our cost to income ratio improved by seven per cent; Thanks to effective action on delinquent loans, NPL ratio improved to 4.5 per cent as compared to 5.3 per cent prior year; Our solvency ratio continues to be solid, which at 17.3 per cent we are above NBC’s solvency requirement; Our return on equity increased to almost 19 per cent, which is higher than target, and also higher than our prior two years; During 2012 net profit for Canadia Bank grew by 63 per cent as compared to 2011l.

What is Canadia Bank’s recipe for success?
Canadia Bank is building a strong and resilient organisation; with sustainable business franchises and a long term view, and we are well positioned and prepared for competition.

In keeping with a history of disciplined growth, the Bank will continue to grow and strengthen existing core business line and grow its core commercial banking business. In due course we will also announce the consummation of our respective partnerships with two significant regional partners with strong reputations and brands, and standing in their respective markets, to start two new business franchises, which will transform Canadia Bank into a Universal Banking Group; capable of delivering a complete range of financial services from commercial banking, microfinance, life and general assurance, and investment banking to our existing and potential customers. Strategically, Canadia Bank will become a clearly diversified and successful Cambodian financial institution, able to stand strong and tall amongst the regional banks within ASEAN.

Meanwhile, we also continue to receive requests and invitations from large and established financial institutions with strong global presence expressing their keen interest to partner with Canadia Bank and to partner their respective customers’ intentions to invest into Cambodia.

These recent developments point to and provide clear indication of strong growth, and continued financial strength and leadership Canadia Bank’s reputation and standing amount financial institutions globally is a direct result of our disciplined approach to growth, financial soundness and fidelity to our customers, shareholders and employees.

Having built a strong and successful banking franchise in Cambodia, we have now, a clear and logical aspiration to grow our franchise into the region. We are presently evaluating an opportunity to enter a neighboring country, partnering with a strong and establish institution in the region and we hope to be able to make an announcement within the next quarter.

In addition, we are also watching the exiting developments in Myanmar as well as in China with a keen interest.

Maybank rated13th strongest bank in the world by Bloomberg

2013-07-11T21:32:00.005-07:00

Maybank was ranked number 13 in Bloomberg Markets Magazine’s third annual ranking of “The World’s Strongest Banks” in the June, 2013, issue.

The banks were ranked based on several ratios including capital to risk-weighted assets, non-performing assets to total assets, loan-loss reserves to non-performing assets and costs to revenue.

Here in Cambodia, Maybank’s CEO Lee Tien Poh was pleased to hear the news. In Cambodia for over a year now, Lee previously held various portfolios at Maybank’s International Division and has been the Head of Overseas Operations, Head of Strategy & Business Development and Head of International Strategy & Operations, with Cambodia as one of his oversight responsibilities even before he was appointed as CEO just over a year ago.

Maybank Group, which employs 47,000 people, is Malaysia’s largest in terms of total assets with more than $162 billion and $25 billion in market capitalisation. A public listed company, it is also the largest company in Malaysia and the major shareholder is Permodalan Nasional Berhad, the investment arm of the Malaysian government.

Maybank has been operating in Cambodia for two decades now, and will be celebrating its 20th anniversary this year.

“It all started in 1993 with only one branch in Phnom Penh,” Lee said.

“Back then, our business model was to support Singapore and Malaysia businessmen. In 2007, we changed our business model as we decided to adopt a long haul strategy to also serve the local community and started to expand our network.”

From 2008 to 2011, Maybank added 10 more branches and by 2012, had a total of 12 branches.

“By the end of 2015, we are projecting to operate more than 20 branches, with 80 per cent of them in Phnom Penh and 20 per cent throughout Cambodia,”

At the moment, the eight branches in Phnom Penh are complemented by four outside, with one each in Siem Reap, Battambang, Kampong Cham and Sihanoukville.

Maybank has also expanded its ATM network with three offsite ATMs, one at the Bayon Supermarket, one at the Phnom Penh International Airport and one at the Siem Reap International Airport.

Lee says Maybank intends to have a total of 40 ATMs in Cambodia, onsite and stand alone by 2015.

“These are regionally linked ATMs which means our customers can transact at Maybank ATMs in various regional locations including Malaysia, Singapore, the Philippines, Brunei, Vietnam as well as Papua New Guinea at no extra cost.

The bank is set to further entrench its presence in Cambodia, expanding its reach to serve its customers nationwide over the next few years. Following local incorporation of its operations in Cambodia last year, it is now in the midst of building its capability and introducing new business channels. Its total staff strength is expected to reach 300 by end of this year. In addition, the bank launched its internet banking portal M2U last December 2012 and has set up various new departments to support its growth for example, a credit and risk management department.

Lee says there are signs in the marketplace that the demand for consumer banking products and services are on the rise because of an emerging middle class segment.

“People now have more disposable income which is in tandem with the country’s strong economic growth. There are a lot of development plans in the pipeline, including shopping malls for the middle income families. For convenience, people from this income group will need credit cards and this is where the usage of credit cards will pick up.”

Lee says this growing segment of young working adults will need housing loans, transaction banking services, ATMs and children’s accounts.

He also sees growth coming specifically from sectors like agriculture, education and medical services. It is the country’s agenda to see these productive sectors grow especially agriculture where the focus is on the higher value chain.

“Efforts are being directed to manufacture finished food products from the produce of the land, for example noodles and rice crackers from rice. This is to ensure that value is added within the country. The other important growth sector is infrastructure development, the improvement of roads, highways and railway lines. Generally, at Maybank, we support the productive growth sectors of the country,” Lee said.

Maybank now offers consumer and business loans. Lee says that granting trade financing facility to support local businessmen is also among Maybank’s agenda.

As at end December 2012, Maybank Cambodia’s loan portfolio surpassed the US$200 million mark and its growth outpaced that of the banking industry.

“We deal in US dollars at the moment, and we are already having an initiative to offer Khmer Riel accounts,” he said.

Back when he was overseeing the Cambodia operations from Kuala Lumpur in 2008, Lee saw a need for local banking talents to support the expanding growth there.

“I was initially puzzled why we couldn’t attract local talents. The market probably at that time did not know us well and felt we were not expanding our operations aggressively.”

Since then, Lee has headed an effort to hire talented people who have more than five years experience in banking and let the word of mouth spread around that Maybank has changed its business direction and expanding aggressively.

“We hired some key talents and this started to change people’s perception of Maybank. Since then we received overwhelming requests from people wanting to join us. There are many young Cambodians who were educated overseas, and to this group it is not so much about compensation and benefits but our compelling vision and mission and how they can grow with us. They are young and they want to make progress,” he added.

One of the key differentiators for Lee in a market of more than 32 commercial banks is Maybank’s mission of humanising financial services in Cambodia. Humanising would mean providing people with convenient access to financing with fair terms and pricing, advising customers based on their needs and being in the heart of the community they operate.

“In order to illustrate being in the heart of the community, apart from been a socially responsible corporate citizen, when we develop products and services we think of customers needs first and that the products and services will bring value to them. The profit element is the consequence of our effort to serve the community.”

Maybank Cambodia’s vision, according to Lee is to be the first-choice financial services provider in the country.

“First choice would mean whenever an existing and potential customers look for banking products and services, Maybank is a first choice as we walk the talk on our mission. We treasure long term business relationships and promote a win-win situation for us and the customers.

“It is common to hear people say that the customer is number one. We always tell the customer that we need to win together in order to sustain our relationship. When we share this with many of our customers, they firmly acknowledge it and confirm that we are the bank they want to deal with in the long term,” Lee said.

Banking most transparent industry in the Kingdom

2013-07-11T21:32:00.002-07:00

The Deputy Director General for banking supervision at the National Bank of Cambodia says the banking industry is the most transparent of all the industries in Cambodia.

The NBC’s Chea Serey, who has participated in the evolution of Cambodia’s banking system since 1999, says she’s proud of that transparency because the stewardship of the monetary system is part of the public trust.

“This is the money of the general public and it is our money, yours and mine” Chea Serey in an interview on Wednesday at NBC headquarters on Norodom Boulevard.

“All of our families and friends deposit money in the banks. It is our strong interest to make sure the banks are playing safe. And banks have the obligation to be transparent to the general public.

In fact you can walk into any bank and even if you don’t have an account there, they are required to provide you with their annual audited report,” she said.

The transparency required of all banks operating in Cambodia as mandated by the NBC means it is difficult for illegal activity to take place.

“When all your numbers are audited, you can’t embezzle. NBC is also audited by an external auditor as well. All banks have to justify where this money’s coming from and where it is going to,” she said.

Born in Phnom Penh in 1981, she attended Batuk School until the sixth grade and then carried on her education in France for middle and high school and finally Singapore at the French International School.

Chea Serey joined the NBC in 1999 following her graduation from Victoria University in Wellington, New Zealand. In 2002, she joined the NBC’s banking supervision department and has risen through the ranks since then.

Chea Serey’s banking supervision department employs more than 100 people.

NBC is an independent regulatory and supervisory organisation, not under any ministry.

She remembers back in 2000 when she first joined, NBC ordered the liquidation of 17 banks that were unable to meet the minimum requirement of $13 million in paid-up capital.

“We closed them down,” she said. “We can close down banks if they don’t comply with our regulations and it is also in our power to change the management of a bank if they are not doing their job.

We have the right to approve or disapprove their members of the board,” she said.

Today, the minimum requirement is $37 million in paid up capital, but even with that amount of money, being a bank in Cambodia is regarded as a privilege.

“Banking is not like any other business. That’s why they are strictly regulated.”

More than 1,200 people are employed by NBC and many of them women, a unique and arguably beneficial feature of Cambodia’s financial landscape.

She says it is amusing when all-male delegations arrive from the World Bank or IMF and they are met with colourfully dressed Cambodian women on the opposite side of the room.

When she started work at the NBC, there were 16 banks and now there are 38, seven or which are specialised banks and 32 commercial banks.

“Those are mostly foreign banks, and I think it is a good sign. When a country is able to attract more banks says something about the country’s potential.”

Chea Serey is acutely aware that political stability of paramount importance for any financial system.

“You can talk about any other factor, but if you don’t have political stability nobody will come. You have to have predictability if not certainty when you do business by investing in a country.

Therefore when you see investors coming in, it is a good sign that they trust in us and that they would also bring along a lot of capital. If you consider one bank bringing in $50 million, you do the math, that’s a lot of money,” she said.

She cited a study by the World Bank that showed a strong correlation between access to finance and economic growth. That’s why she’s happy so many banks are coming to Cambodia. Yet, she is watchful of competition in the marketplace and what that means for the financial system, which can be good and bad at the same time.

“Banks coming in provide finance and create competition which lowers interest rates. Interest rates on loans have come down if you read our annual reports from 16 per cent to 10 to 12 per cent.

Yet at the same time, if too much competition is injected into the marketplace, it can be detrimental for the whole financial system,” she said.

“Banks need to make a profit. If the competition is too fast and too stiff it can also be bad. If your profit is compromised, you may curtail development.NBC is making sure that competition is fair and doesn’t dampen the development and compromise the stability.

Another issue for the NBC is the dollarization of the economy, which Chea Serey explains was a consequence of Cambodia coming out of post-conflict poverty and the UNTAC period.

“People tended to not trust the local currency and we saw the greenback coming in when the laws and regulations were not so strict, so it just happened and we’re stuck there, and it is difficult to reverse the trend.”

Generally people use another currency is because they don’t trust domestic currency because inflation rates are too high – and today in Cambodia, the inflation rate is very low compared to other parts of the world.

“Our inflation rate is very low, this year only 1 per cent year on year, and the exchange rate is very stable, about 4000 Riel per dollar during the past 15 years. This is a good ground for people to save in local currency”

She said that NBC has developed a draft national strategy to promote the use of local currency.

“Our intention is to have all the price quoted in Riel, though customers can have the choice to pay in Riel or USD for a transition period.” she said. “We will have a public consultation, consultation among the ministries and hopefully the government will adopt it we hope before the end of this year. De-dollarization is very critical now.”

Chea Serey says Cambodia needs to have the ability and the tools to set interest rates.

“We need to be able to use our local currency because it shows our independence and shows our sovereignty.”

As for the future, Chea Serey approaches it with cautious optimism. “I see a lot of potential in the banking system. I see development coming and potential in contributing more to the economy, more to poverty reduction and banks are starting to provide mortgage loans. Newly married Cambodians are getting loans for houses. Microfinance institutions are providing loans for motorcycles and appliances.”

She said that while rapid growth is good, there are mechanisms in place to “put on the brakes” if the economy starts to get overheated.

“We are moving too fast, we can use tools to put on the brakes. At the moment we are watching very cautiously on the speedometre and it is going okay. We need to see if the road is conducive to that speed. If the bank is going too fast and the economy is not there, it’s a problem. If the economy can absorb it, we will be okay. We look at road conditions and the speedometre, and we watch for any hazards, warning sign along the road.”

Some of the recent work of the NBC includes the development of the “Interbank Market” by the third quarter of this year which enables banks to use the NBC’s negotiable certificates of deposit.

Banks will be able to use the Interbank Market for their liquidity management, she said.

Electronic payments company Wing set to transfer a billion dollars this year

2013-07-11T21:31:00.002-07:00

CEO wants to shift cash to mobile and internet

What started out as an idea by ANZ Bank to help low income Cambodians transfer money easily to the provinces has grown into a profitable business with a young CEO who sees a coming sea change in how people pay for things in Cambodia.

Anthony Perkins, 36, who joined Wing in 2008, said last week if growth rates continue at current levels, Wing will process more than a billion dollars this year.

Perkins said that starting in June 2011, Wing’s domestic remittance product has “caught fire” and has been growing at 25 to 30 per cent per month. In March, Wing processed $75 million in transactions.

Perkins attributes Wing’s success to the quality and visibility of the network which has 900 Wing Cash Xpress locations which enable people to use their cell phones to transfer money and collect cash from anywhere to anywhere in Cambodia, along with 7,000 Wing phone top up dealers nationwide.

“Our remittance product is uniform and nationwide,” he said.

What helped Wing really take off was advertising.

“We advertised the fact that you could get money from A to B for a cost between $0.50 and $1.50 and move any amount, no matter how far. Other providers have complicated pricing structures,” he said.

Competing money transfer services include microfinance institutions (MFIs), banks and informal methods.

Perkins said mobile phone top-ups capability really helped Wing take off in mid-2009.

“Log into a Wing account and you’re topped up immediately with any mobile operator. That was the first product that kicked off.”

The first mobile operator Wing signed up was Hello in January 2009, but gradually all the other operators have been added.

“The last one to go live was Cellcard in January this year,” Perkins said. “That was the last significant piece of the telco jigsaw.”

The next big adventure for Wing is taking the network of 7,000 Point of Sale terminals around Cambodia, normally used for mobile phone top-ups, and integrating those into Wing’s system so people can use their Wing cards and mobile phones to easily pay for things everywhere.

The system will enable people to make payments with any phone or Wing ATM card using “near field communications” (NFC) technology.

“We’ve got 7,000 dealers who print phone top up and we are in the process of putting those two networks together,” Perkins said. “The benefit is we got an ATM card and the largest point of sale (POS) terminal network in the country by far. This makes retail payments very easy. You’ll be able to walk into a supermarket or mini-mart for example and pay with your Wing card or your phone.”

Perkins said Samsung’s smart phones have NFC technology already built in, creating a large existing retail customer base. He said 1,000 of the 7,000 POS terminals around Cambodia are already NFC capable.

Retail outlets including Score Bar in BKK1 are already testing the NFC technology, Perkins said.

Perkins says another big future growth area is online payments.

Wing, which has 160 employees, is now developing an online payment system similar to PayPal. Perkins says the system, now in a trial phase, uses an “application programming interface” or API.

Perkins says Wing is also connecting their service with Visa so that Wing cards will also become Visa cards in the future, “Coming in July you’ll be able to do Visa transactions and the great thing is this opens up international remittance. By tying up with Visa, it means any Visa card holder can send money to any other Visa card holder.”

Perkins says people can store money in Wing accounts and while they don’t get interest payments like banks give, there is a zero minimum balance and there are zero monthly fees.

“We don’t charge account keeping fees. If you just want to put your money in there and keep it safe, there’s no charge for that.”

The big picture for Perkins as Wing CEO is to replace cash movements with electronic.

“We do a lot of payroll and we’re starting to do business to business transactions,” he said. “For me the key thing for Wing is basically to replace cash. Wherever there is cash we want to replace it with electronic. The speed of it gives you the ability to move money from one place to another securely and instantly, whether you have to send money to help family with weddings, funerals or anything like that,” he said.

Perkins said opening a Wing account is easy, costs 10,000 riel ($2.50) and is free for Cellcard customers during the month of May.

Wing cards can be used to take out cash at ANZ Royal ATMs in Cambodia.

Originally started by ANZ Bank as way to help Cambodians inexpensively move money, Wing today is owned by Wing Singapore Holdings Group.

One of the original donors to help get Wing started in rural areas was AUSaid/ECF.

Perkins said AusAID officials at a recent conference in Canberra were astonished to learn that Wing had become profitable so soon, in a world where the majority of mobile money companies around the world have struggled to succeed despite heavy investment.

“They nearly fell off their seats,” he laughed.

Perkins encourages aid agencies to use Wing services to get cash where it is needed.

He said mobile money is widely used around the globe as a means to distribute aid money.

“If large aid agencies can do it in Africa, they can do it in Cambodia, We're ready” he said.

Perkins also responded to a request from Google to help them with advice on how to get mobile money up and running quickly to distribute financial aid following the earthquake disaster in Haiti in 2010.

Wing helps prevent skimming in places like garment factories, Perkins said, by enabling the payments directly to the employees. Perkins said the average Wing transfer is about $70 and the current maximum is $2,000.

Wing headquarters is located at No. 30, Street 432 and their website iswww.wingmoney.com

Largest MFI sees increasing marketplace competition

2013-07-11T21:29:00.002-07:00

Q and A with Sim Senacheert, President and CEO, PRASAC Microfinance Institution

When did Prasac start in the business and what are some milestones along the way to your present situation?

PRASAC was a credit component of the former PRASAC (Programme de Rehabilitation et d’Appui au Secteur Agricole du Cambodge) project started in 1995 as a support program for the agricultural sector in Cambodia, covering six provinces around Phnom Penh which was a rural development project in Cambodia, funded by the European Union. The whole PRASAC project was phased out in December 2003, except its credit component continues operations under the name PRASAC Credit Association (PCA) and was finally transformed into a licensed MFI in December 2004 under the name of PRASAC Microfinance Institution. The followings are the milestone:

1995-1999: PRASAC I, EU-funded three rural development projects in six provinces, with three different credit components.
2000-2003: Extension as PRASAC II combined to one project, one credit component.
2000: First strategic decision to create a sustainable institution beyond the closure of PRASAC II project.
2001: HO and branch offices separated from PRASAC II, with separate management but still under umbrella of the project management.
2002: The establishment of PRASAC Credit Association (PCA) registered with the NBC in March 2002 as Rural Credit Operator.
2003: Two initial shareholders were created, a Trust Fund called CRDF created by PRASAC II and PRASAC Staff Company created by staff members to facilitate the transformation process.
2004: Registered as PRASAC MFI Ltd with Ministry of Commerce as a private limited liability company and received license from NBC.
2006: The commercialization process was to seek for equity investment participation from commercial and social investors.
2007: PRASAC completed its transformation with new five international shareholders, BIO, DCG, FMO, LOLC, and Oikocredit.
2008: PRASAC increased its capital to 15 billion Riels from six shareholders. PRASAC was rewarded for extending its financial services throughout the country.
2009: PRASAC selected Oracle Flex cube to modernize its core system to build competitive advantages, offer more diversified ranges of products and prepare for the next level.
2010: PRASAC obtained a Microfinance Deposit Taking Institution (“MDI”) license to conduct deposit taking business from the National Bank of Cambodia. And PRASAC increased its registered capital from 15.4 billion Riels to 80 billion Riels.
2011: Launch of 5 additional branches.
2012: Launch of ATM service and become the first MFI offering ATM to clients in the country.

What interest rates do you offer for savings accounts in Cambodian Riel?
The followings are our current interest rate of Cambodian Riel (KHR) offered to the depositors:

How is the growth during 2012? Do you expect more growth in 2013?
The deposits grew above 800 per cent from US$5.9 million to $56.7 million at the end of December 2011 and December 2012 respectively. We expected that deposits will grow as per our projections at 200 per cent. As of April 2013, our deposit grew about 74 per cent compared to December 2012.

What are the challenges in the microfinance marketplace in Cambodia?
Microfinance marketplace in Cambodia faces some challenges including the increase of competition, limited funding sources and high cost of funds.

Are you seeing more competition in the marketplace?
Yes, we see that there is more competition in the marketplace. The competition comes from expansion of the existing MFIs, new established MFIs, and commercial downscale the operations. More competition is good for the end-users (clients). But, it is not a concern for us because we have large operational area (nationwide coverage), big office networks, diversified products, more than 15
years’ experience in the sector, and strong branding in the sector as well.

How many total staff do you have and how many branches around Cambodia?
As of April 2013 PRASAC has 2,507 staff and 170 office networks operating in all provinces of the country.

How many ATMs do you have? Where are they?
As of April 2013, PRASAC has 29 ATMs. 13 ATMs are located in Phnom Penh and 16 ATMs are located in provincial branches. This year, we planned to add another 30 ATMs.

What’s your percentage of bad loans?
Non-performance loans are very stable during the past quarter of the year. As of April 2013, the NPL rate was 0.21 per cent.

What’s your average loan size and what’s a typical business you loan to?
As of April 2013 the average loan portfolio or outstanding loan was US$1,844. The main typical businesses are agriculture represents around 30 per cent of total loan portfolio; business loan portfolio represents 45 per cent, personal loan 23 per cent, and other activities 2 per cent.

How do you see Cambodia’s future unfolding in the microfinance sector?
I think that the Cambodia’s microfinance sector is still good and strong because of economy growth; clients have more business activities, increase of the professional and high standard of the all MFIs, supportive regulations

Do you see people starting to have better lives in the provinces?
I think that we see people starting to improve their living standard. To some extent I think that MFIs also contribute to this development.

Are you now the largest Microfinance institution in Cambodia?
In the MFI sector, we are the largest in term of total assets, loan portfolio outstanding, office networks, savings and deposit balance, and we are also the best performing MFI in terms of portfolio quality, productivity and efficiency, and profitability in the country as well.

To what do you attribute your success?
A. I think that there are many factors, but can be summarized as follows:

Support from the government, and especially local authorities
Enabling regulation environments, strong and supportive regulators
Loyal and discipline clients
Strong governance structure, good and supportive shareholders and the Board
More professional and high commitment staff and management
Strong institutional capacity ie, internal control, policies, procedures.

What are the long term prospects for microfinance in Cambodia?
I think that after gone through all the difficulties and challenges in the past, microfinance in Cambodia is now on the right track and right direction, therefore, I think that it will continue growing in the sustainable manner and continue to contribute to the development of the country by providing access of the banking services to the unbanked people, especially, in the rural area.

The Prasac website may be viewed at www.prasac.com.kh.

Knuckey suggests voluntary code to benefit entire banking industry

2013-07-11T21:28:00.003-07:00

The CEO of ANZ Royal says he’d like to see banks in Cambodia adopt a voluntary code of banking practice to raise industry standards and improve the banking system for customers at every bank.

Grant Knuckey, who serves on the executive committee of the Association of Banks of Cambodia (ABC), said that unlike in the case of “the strong survive” evolution of the telecommunications companies, the same formula wasn’t an optimum paradigm for the banking system.

“For a banking system the optimum is to make sure everyone is strong. Failure in the banking system is not the same as in telecoms. Failure in the banking system can create potential systemic risk for an economy,” he said.

“At present I don’t see any particular risk, but the key is to make sure it doesn’t get there. If you continue to have a large number of providers targeting a relatively small target population, it is unlikely to lead for a healthy economic outcome for all those banks.”

In Cambodia where only about 12 per cent of the population use banks, Knuckey says it would be difficult to describe the country as generically “overbanked”, but at the same time, the 35 commercial banks here constitute a crowded marketplace for the amount of available customers, he says.

“When you look at the target space that commercial banks are occupying in Cambodia, the true ‘bankable’ population for commercial banks is not that large, and is in my view over banked, even though the population of the country overall is not overbanked. There are too many providers all targeting the same customers – which in the short-term is good for the customers, but in the medium-term is unhealthy for investment and the system,” he said.

While some people would look at regulation as a way to address the issue of so many banks operating in a relatively small market, Knuckey says the Cambodia banking industry needs to move toward greater self-regulation in terms of standards.

With the Association of Banks in Cambodia, he is taking the lead in the development of a code of banking practice.

“This is a hallmark of any good mature banking system. You’re attempting to impose good standards on yourselves. It means things like setting baseline standards of the way that customer accounts will be operated, the minimum obligations of banks and the way complaints are dealt with.
“I think the time is right now for Cambodia to look at something like this and personally I’m quite determined to lead the charge on that because everyone will be a beneficiary,” he said.
He said there’s a supervisory challenge among the large number of banks in Cambodia, which banks must take some ownership of.
“It is increasingly difficult for customers to make an informed choice. If you put a code in place that all banks must sign up to and adhere to, you’ll raise the bar for the entire industry, and I think that’s important.”
With the recent development of a National Arbitration Centre, Knuckey said that organisation could develop and provide an industry-level dispute resolution mechanism.
Some examples of what Knuckey suggests should be targeted are the imposition of penalty fees in a non-disclosed way, in cases where an unaware customer suddenly gets charged a banking penalty.
“This is the obligation of disclosure. You’re trying to ensure full disclosure so that the obligations of a bank to its customers are well articulated and understood”.
Asked to differentiate ANZ Royal from other banks in Cambodia, Knuckey said its point of difference in consumer banking was the level of customer service, and in corporate banking it was the relationship-based approach of the bank.
“I believe we have the market leading level of customer service in Cambodia. It is about the quality of the interaction you have and that ultimately comes from having the best trained people in the market. We put a huge amount into training,” he said.
Knuckey says ANZ Royal is on a strong growth trajectory, but not by opening more branches because he believes 10 years from now a great deal more of banking transactions in Cambodia will be electronic.
“In our view in the medium term, the best delivery channel for our customers won’t be more and more branches, particularly as Cambodia transforms from a cash economy to more electronic economy,” he said. “Increasingly the preferred and channel for consumers and business, as well as the economic channel for banking provider, will be electronic. For us, and it’s not the same for every bank, over-investing in physical branch infrastructure would be inconsistent with our strategy and not likely to be economic.”
Knuckey says Cambodia is not going to transform from a cash-based to an electronic economy overnight.
“But equally we are not setting our strategy for next week: we are setting it for the next decade. We have to set that strategy with a view to where Cambodian banking is heading over the next 10 years and it will be toward greater use of electronic channels. I would think Cambodia will do that in an accelerated way.”
Knuckey said ANZ Royal’s overall strategy is based on “primary customer segments” including institutional clients, the top end of Cambodian corporates and the international community.
In the mid-market commercial segment, the focus is on working with local Cambodian corporate customers and using ANZ’s regional relationships to support the supply chain.
“Our target and positioning is around customers who are part of the supply chain of larger customers, and they may be suppliers to or buyers from large multinationals who are already our customers.”
Knuckey said there are also industry-specific areas of focus such as agriculture that are the focus of attention.
The other important segment, he says, is consumer banking where ANZ Royal is targeting what it describes as the “emerging affluent” customer.
“These are people who are building their wealth. They may be young professionals or business owners, but the common element for all of them is they are looking to build their wealth. That’s the target for us in consumer banking.”
ANZ opened an office in Yangon in April, an office which, along with ANZ’s significant presence in Laos, is under Knuckey’s leadership.
“We’re in the beginnings of what will be a long term process of learning as much as we can about that market and looking for ways we can monetise our presence in Myanmar,” he said. “What I’ve found very pleasing so far is the sheer amount of interest from ANZ’s customers around the world in Myanmar and various opportunities there. I don’t think by any stretch it will be a straight line trajectory, but it is still clearly a positive trajectory and the amount of customer interest is a pleasing sign.” he said.
From the current small representative office in Yangon, Knuckey plans to eventually have a full-scale operation in Myanmar.
“We will scale up at the pace the regulator allows us to. If you look a decade in the future, Myanmar should be a substantial part of ANZ’s presence in the region and we‘re willing to take the time to get us there.”
In addition to his executive committee role at the Association of Banks of Cambodia, Knuckey also serves as president of the Australian Business Association of Cambodia (ABAC) and is working on a plan to work together with other Australian business associations in Vietnam and Laos to create regional integration between the chambers.
“We’d like to get a blueprint in place for taking these three Australian business chambers to the next level, more professional organisations,” he said. “They won’t be one entity, but we’re going to work together on what will be a relatively common blueprint for the future strategies of these chambers.”

FTB and Wing partner to bring VISA cards to the masses

2013-07-11T21:28:00.000-07:00

Topping up a VISA card can be done by mobile phone or internet

The new agreement between Wing and FTB will enable people all over Cambodia to buy prepaid VISA cards and get them topped up electronically through Wing’s mobile payment system.

The agreement means that it is going to get much less expensive for people to send money to people even in rural Cambodia from anywhere in the world through Wing’s existing Cambodia-wide network by topping up the VISA cards from anywhere.

When Wing CEO Anthony Perkins needed to add Cellcard to the list of mobile operators that could be topped up through Wing’s service, he contacted Dan Felsing, who was then working for Cellcard and they became friends.

Since then, Felsing joined FTB, saw an opportunity and got in touch with Perkins about a possible agreement that has now come to fruition.

According to Perkins, Wing’s first phase of the project is to help FTB by making it possible for Wing customers to top up prepaid VISA cards and launch the VISA card offer to all 440,000 existing customers.

“Our customers can get a prepaid visa card that they can top up anytime through our Wing distribution,” Perkins said. “You’ve suddenly got access to 7,000 outlets nationwide. And the third part is a virtual VISA card. We are working directly with VISA, and FTB, which is the issuer of the card.”

Perkins says the advantage to the public is they don’t have to pay for the overhead of an international bank and decisions are made right here in Cambodia.

“This helps the National Bank of Cambodia which have requested Wing to get involved in international remittance,” Perkins said.

“Phase 2 is for Wing and FTB to launch a mass market prepaid VISA,” Perkins said.

In order to differentiate the Wing VISA from the FTB VISA, both of which will be able to be topped up by Wing, Perkins made an agreement with Rovio of Finland, the owner of the Angry Birds franchise.

“In Thailand, one card issuer did it with Angry Birds and ran out of cards,” he said.

Wing is targeting August for the launch of its Wing “Angry Birds” FTB VISA card. Meanwhile, they’re helping card issuer FTB with the added advantage of customers being able to top up their FTB VISA cards via Wing’s service.

With the hearty support of the National Bank of Cambodia, Perkins says the service will make it easy, especially for overseas Cambodians to send money back home to their relatives, even in rural areas.

“The National Bank of Cambodia is keen for us to do international remittance especially for migrant workers. There are Cambodians struggling to send money home and existing methods are so expensive.”

Perkins says Wing is talking to multiple partners like Western Union and smaller players to be involved.

“The end game is once you’ve got a VISA card it opens you up for international remittance from one VISA card to another which effectively gives you an international remittance.

“One of the key things about Wing is the ability to be dynamic and innovative,” Perkins said. “A lot of banks are slow moving technology-wise, particularly the international banks, because they use the same platform and the same processes in numerous countries that don’t necessarily accommodate the nuances of individual nations. Wing can move much faster on technology because of our local team, whether it’s mobile or online payment, enabling people to pay for goods online like a PayPal.”

Perkins said Wing is working with multiple banks on becoming the clearing system for any card payment through a Point of Sale (POS) terminal.

“In some cases banks might want to extend their POS network, so how about bank customers being able to use Wing outlets? The POS effectively becomes a mobile ATM that we can use for the banks.”

Perkins said ACLEDA, Canadia and ANZ have the biggest bank POS networks in Cambodia, consisting of credit card machines that banks issue to restaurants, hotels, supermarkets and other businesses that need to offer credit card payment facilities. He says Wing has as many POS devices as all the banks in the nation put together with some 7,000 machines now in operation for printing pre-paid phone top up vouchers.

“We are looking to take on bank POS networks either to run it for a bank, or to extend it for a bank,” Perkins said, adding that at least two banks have already expressed interest.

He believes the mass market VISA card with low fees will be winning strategy.

“By making it mass market we can harness our very large customer base and make our fees very microscopic and only five per cent of the country has a bank account. There is still a massive opportunity for people who are currently unbanked, and that’s what we are here for is to bank the unbanked, and give services to everybody in the country.”

Perkins said Wing strategy was set up to help the Cambodian people easily move money around, even in small amounts and for ordinary rural citizens, but that the same strategy applies to larger players.

“We were set to look after the little guy, but also by doing that, we are developing such cool products that they are actually relevant to the big guy as well.”

Perkins said people can open a Wing account for $2.50 and after that can have a zero balance and zero monthly fees, yet with the same security as a bank.

“Wing has the same security as a bank because the money does sit in a bank. You’re getting the security, and if you don’t use it, you don’t pay. It is safer than keeping it under the mattress.”

Perkins said Wing has already signed a deal with Tiaxa, a Chilean company that offers credit risk based on historical mobile phone top up records to issue small amounts of phone top up credit and is also looking into the possibility of small short term unsecured loans to its existing customer base in the future.

Even though ANZ sold Wing in November 2011, ANZ still holds the license and holds all of the Wing customer deposits, Perkins says the current agreement with ANZ is not exclusive, enabling Wing to also work with other banks.

“The current agreement with ANZ is not exclusive, so we can work with other banks,” Perkins said. “The National Bank of Cambodia has oversight of Wing, and we send the NBC figures every month, but we work very closely with the ANZ compliance team. We can be a bit more creative and dynamic and we have the ability to create new products and adjust to the market quickly is crucial to Wing. We are effectively a technology company and we employ our own Cambodian technology team. We’ve got a team of about 20 technology developers.”

FTB issues first VISA cards in Asia that can be topped up via mobile phone

OREIGN Trade Bank of Cambodia’s deal with Wing marks the first time in Asia that people will be able to top up their VISA cards with a mobile phone, making the transfer of money to Cambodia easier and less expensive than ever, from anywhere in the world.

The deal is an example of innovators in Cambodia being able to leapfrog to the latest technology, unhindered by existing systems – similar to the way cellular phones leapfrogged past land line telephones here.
Already an issuer of prepaid VISA cards for the last two years, FTB teamed up with Wing two months ago to take advantage of Wing’s distribution network to make prepaid VISA cards easier than ever to get in Cambodia, according to FTB General Manager Guy Anvanith.
“What’s powerful is for the first time we are connecting VISA, FTB and Wing, the whole of Cambodia will be connected to the financial services of the rest of the world,” Guy said. “Without Wing we would never have been able to reach a thousand outlets in a short period of time. That’s why we found this opportunity to work with Wing very timely,” Guy said.
“We are bringing a product that makes service accessible across the world to Cambodia through a formidable system which has developed over the years,” he said.
According to the agreement, FTB and WING will sell co-branded VISA cards through all 1,000 Wing Cash Express outlets and FTB branches across Cambodia. Cardholders will be able to top up their VISA cards at any of 6,000 total Wing outlets, just like they top up their mobile phones.
Wing will start distributing the FTB-WING co-branded VISA cards to the 1,000 Wing Cash Express outlets in August.
Guy says that FTB wanted to offer prepaid VISA cards that students, businessmen and travellers could get easily. He hopes Cambodia will soon be flooded with VISA cards.
FTB’s Project Director for Cash Card Distribution & Mobile Payments Dan Felsing, who has been working on the project with FTB’s Senior Manager for Card and E-Banking Ros Sokha since he joined the company three months ago, says you don’t even need a bank account or collateral to get the VISA card.
“This project puts Cambodia as a trailblazer of new technologies,” Felsing said. “It is FTB and Wing who are also both front runners in their respective spaces as market leaders. This puts Cambodia in first place. Even the US doesn’t have this. It is brought to you by a bank that is an innovator and a mobile money service that is also an innovator.”
The least expensive pre-paid VISA card can be obtained for $3 and can be topped up with any amount. Personalised cards come in two levels, blue for a minimum initial load of $500 and gold for an initial load of $5,000 or more.
“The $3 prepaid card is good for gifts and online purchases. You can also withdraw money for free at FTB ATMs,” Felsing said.
Currently, customers can purchase an FTB prepaid Visa for a minimum of $23. The $23 card comes with a balance of $20, with a $3 charge for the plastic, and is available in a few minutes at FTB branches or with select merchants. The blue and gold cards are available the next day, or in two hours if purchased at the FTB office where they’re produced on the corner of Streets 214 and 63.
To top up the FTB/WING co-branded cards using a Wing account, a customer needs to have balance in their Wing m-wallet. Customers then have the option of topping up their Visa from their mobile phone or with any Wing CashXpress agent using their 16 digit Visa card number and 4 digit WING pin number.
FTB’s Project Director Felsing had earlier worked with Wing CEO Anthony Perkins when Cellcard Cash became part of Wing.
“We had a close relationship and because of mobile money exposure, I knew what was possible,” Felsing said. “One of the things I thought of was why not partner with Wing if possible, and said hey, are you guys interested in doing something?” Felsing sent Perkins an email and the deal was done two months later.
“This was a case where FTB already had the product and in my mind it seemed like a very good fit, with what FTB had already built, and with what Anthony had already,” Felsing said.
Perkins meanwhile had already been talking to VISA, thinking along similar lines.
“We had been working with Visa as to how to do this and VISA said we needed a bank to back these cards and be the issuer. We knew that FTB was the only bank with prepaid Visa cards, which exactly matches our target customers,” Perkins said. “We’ve managed to throw all this together in two months.”
FTB’s General Manager Guy Anvanith gave Felsing the green light to make the link with Wing because both Wing and FTB shared the common purpose of reaching people who don’t yet have bank accounts.
“We are like two brothers that are targeted to the unbanked population. Just like Wing, we are trying to reach the unbanked by linking up Wing’s clients. That means this population has a possibility to do banking if they choose to and there are millions of people who can step up to do traditional banking. The other feature, in addition to accessibility to the rest of the world, is that you have a trust and safety feeling because you have a solid bank behind it,” Guy said.
FTB already has ATMs with biometrics technology, enabling people to access cash just with their fingerprint, as well as internet banking.
“In terms of technology with our product portfolio, we have ATMs with biometrics technology, we have internet banking and we have cards. What we were missing was a mobile link. By hooking up with Wing we have the fourth leg. The next step would be to make everything much easier to use. No other bank would have all these products,” Guy said.
“One thing that is really great about this is the minimal investment. It is just hooking it up. It is amazing, and all the systems are in place. Up until now, you have had plastic only confined within Cambodia. Visa makes it accessible to the rest of the world. From Long Beach California, somebody can top up somebody’s card in Ratanakiri and you can use all the ATMs in Cambodia,” Guy said.
Fees charged will be different at various ATMs, depending on the bank.
Guy said the philosophy was “pay per use”. Both FTB and Wing will make money by charging small fees on the transactions.
“Our conversations have been focused on not making the fees cost prohibitive,” Felsing said.
Wing’s largest transaction fee is $1.50 currently and Perkins says the fee for topping up the VISA cards is likely to be between $1.50 and $2, but is still being discussed.
An estimated $1 billion per year comes to Cambodia by transfers, with an estimated one-third of that amount going through banks and Western Union, according to Perkins.
“People also bring in bags of cash. Our vision is to replace cash wherever it is and the more electronic transactions we can do, the better. Fees for transfer from overseas to Cambodia will be way below existing channels,” he said.
FTB’s Guy says technology is moving very rapidly.
“This is a very power tool for us to reach a population we would not have dreamed of reaching without technology, which differs from brick and mortar branches. We are hooking up different distribution channels apart from the traditional. No one from the banking system here has cooperated from a non-bank institution. A lot of it has to do with trust, the understanding of technology, and how to control it.”
The Cambodian Government’s Ministry of Economy and Finance owns 10 per cent along with a local company called Ing Holdings which is related to the AZ group of companies that holds the toll road franchise to Sihanoukville and large real estate developments and has a 44 per cent of FTB and the rest is held by two private individuals.
“We want to open up banking to everyone, no longer a niche player,” Guy said. “We have seven branches, going to 10 by the end of this year. We completed an internal reorganisation last year and we have a retail structure in place,” Guy said.
New FTB branches will open in Central Market as well as Tuol Kork. Further branches are planned in Battambang and Kampong Cham.
Guy said a key for FTB was a very conservative way of managing the bank. Of the $400 million in deposits, $220 million is kept in cash.
“You can be sure that if you are a depositor, that you can get your money back anytime, in any amount. We provide safety to our customer and we have maintained a very strong capital base with more than $65 million in shareholder equity.”
Guy said FTB posted a 1.7 per cent return on assets and a 14 per cent return on equity, with 1.4 per cent of non-performing loans.
“We are one of the most solid banks in the country,” he said.
In an interview last week with Guy, Felsing, Ros Sokha from FTB and Perkins from Wing, Perkins said if a Cambodian is in Singapore and has children who need health care in Cambodia, he can top up a VISA card with his mobile phone with roaming, enabling his wife to pay the hospital bill.
“You can do transfers while you’re on the move,” Perkins said.
Guy said people don’t need to keep cash at home, but can just have a card.
Another part of the deal is Wing’s Point of Sale (POS) network, the largest in Cambodia with 7,000 terminals and plans for another 10,000 next year, for a total of 17,000 POS terminals Cambodia-wide.
“Wherever we can get people to accept a VISA card payment, we can provide more places where people can use these cards. One thing is keeping the money safe, but there is also giving them the opportunity to spend the money.”
FTB and Wing plan to issue the Angry Birds Prepaid Visa designs when the project launches in August.
FTB and Wing will share revenues on transactions.
“You’ll be able to use this card immediately and reload it immediately. We’re working on a merchant aggregator where their terminals are also Visa certified.”

HwangDBS bank bullish on Cambodia

2013-07-11T21:27:00.002-07:00

The General Manager of Hwang DBS Commercial Bank, Han Peng Kwang, says the Malaysian-based bank’s rapid growth since 2009 has made him optimistic about the economy in Cambodia.

“We are bullish about this country in terms of growth in the economy,” Han said.

“That’s why the chairman set up this bank four years ago and that’s why we are in the process of expanding our branches. We want to capture more of the market share and assist more people to improve their businesses and livelihood. ,” Han said in an interview last week.

HwangDBS first opened in Cambodia in July 2009 and now has four branches and 80 employees.

Han intends to grow HwangDBS into a mid-sized commercial bank, on a gradual, step-by-step basis in the medium term.

“Our main target is small and medium sized enterprises (SMEs), but specifically focused on medium sized customers such as retailers, wholesalers, businesses in the construction sector, service sector, manufacturing sector, hotels and other industries. As long as they are bankable we will support them.”

Han says HwangDBS offers business loans, retail loans, individual loans, and retail mortgage or housing loans.

“We are giving housing loans for all types of landed properties, apartments and condominiums. However, the properties to be purchased must have a ‘Hard Title’ issued by the Land Management Office, not by chief of the Sangkat or commune,” he said.

The loans and accounts are in US dollars “because at this time the country is still very dollarized”, Han said. “We are catering to all types of business but not certain discouraged businesses like karaoke and casino.”

HwangDBS Commercial Bank Plc is a 100 per cent foreign owned bank established by financially sound and leading integrated financial specialist group, Hwang-DBS (Malaysia) Berhad. One of the major shareholders of Hwang-DBS (Malaysia) Berhad is DBS Singapore. DBS is the largest bank in Southeast Asia by assets and the bank’s strong capital position, as well as “AA-” and “AA1” credit ratings that are among the highest in the Asia-Pacific region, earned it Global Finance’s “Safest Bank in Asia” accolade for five consecutive years, from 2009 to 2013.

For business strategy, Hwang DBS gives loans to all kinds of local businesses such as retailers and wholesalers of consumer goods, electronics equipment, machines, spare parts and other medium sized business such as car washes, garages, hotels and restaurants, contractors, manufacturers and businesses linked to the agriculture sector.

The Bank provides our depositors with ATM cards for their convenience. We have plans to introduce internet banking and phone banking in the future, Han says.

The bank has an ATM expansion plan, with five now in place.

“We are also in the process of putting in more ATMs in Phnom Penh City to provide more convenience to our customers,” he said. “We also want to open more branches going forward, venturing out into the larger provinces including Battambang, Siem Reap and Kampong Cham.”

Han said the bank also plans to launch a trade service product to complement their existing services.

“We currently have Term Loan, overdraft and housing loans, and we want to expand that to provide more services to our customers.”

Han hails from Malaysia, from the state of Perak located just below Penang.

Formerly with a commercial bank for over 14 years before he joined HwangDBS, Han first came to Cambodia in 2005 and has seen the landscape change considerably since then.

“Now there are so many high-rise buildings throughout the city and the country has received lots of foreign investment particularly from Korea and China,” he said.

As for operations, Han said HwangDBS has a team of marketing officers who go out and introduce the bank in the neighbourhoods.

“Our branch managers also go out and introduce our bank to all the people in the street. Moreover, satisfied customers will also start recommending their friends and relatives to bank with us. ”

HwangDBS intends to recruit as many Cambodians as possible to fill up the positions in the Bank.

“Maybe one day, one of them will be able to take over my position as well,” Han said.

Maruhan Japan Bank focuses on service

2013-07-11T21:26:00.005-07:00

Q and A with General Manager Onishi Shizuo

What segment of the marketplace is MARUHAN Japan Bank going for?
We are currently focusing on a customer base of mainly small and medium sized, local Khmer businesses who have taken out personal (mainly savings) accounts.

The areas of the marketplace that we are currently working for are:
Students and other young people - for loan products to finance their education of their first bank account, agricultural business: predominantly rice millers, importers and exporters as well as loan and business products, clinics, hospitals and medical business products, manufacturing, hotels and construction. The owners and staff of these kinds of businesses are our customers, often with commercial loans.

How long have you been in Cambodia?
We opened on May 22, 2008.

What currency accounts do you offer?
We have a comprehensive range of accounts in USD, KHR, JPY, EUR, GBP, AUD and other major global currencies for personal and business customers. For personal customers we have everyday accounts that allow day-to-day money management efficiently and securely and these accounts include an ATM card and a passbook.

Our premium saver accounts are interest¬bearing accounts with the option of a savings passbook and an ATM card. We also have checking accounts. With our tiered investment accounts, the more customers save, the higher the interest we give them. This is great for maximizing interest returns on money held for short periods.

We also have term deposit accounts which are fixed-term deposits that offer a low-risk way for investors to earn a competitive, guaranteed rate of interest on deposits. We also have personal loans which can help people finance special purchases or cover essentials such as children’s education fees. There is no minimum or maximum size of loan and all loans are subject to discretion. We work hard to ensure we lend responsibly and one of our “relationship officers” helps people make the best financial decisions based on their particular circumstances by providing effective advice on how much they can afford to borrow based on an assessment of their disposable income.

For business customers including sole proprietors, limited companies and organisations we have checking accounts, tiered investment accounts, term deposit accounts with terms from one to 36 months and a “Term Deposit Certificate” can be used to secure credit facilities such as letters of credit, bank guarantees, shipping guarantees, overdrafts and other requirements.

Maruhan Bank also offers corporate and commercial loans which are appropriate for starting, managing or growing businesses of any size. We provide quick decisions and appropriate and flexible repayment terms and we accept a range of collateral types. Interest rates are competitive and flexible (fixed or variable). The application process is designed to be simple and easy to understand is supported by our dedicated and highly trained Relationship Management Team.

Our overdrafts provide short term support for a business in times of cash flow difficulties, when additional working capital is required for business development or to help consolidate existing debts. Interest is only paid on the amount drawn.

We issue bank guarantees which are guarantees issued by us for an account holder where we agree to pay a beneficiary up to a guaranteed sum when a valid claim, as dictated in the terms of the bank guarantee, is received. These are usually issued in lieu of advance payments or cash deposits. This guarantees a customer’s capability to meet payment obligations and makes them a more credible and attractive trading partner. It also removes the necessity for a customer to raise cash to meet deposit requirements and allows funds to be used to support working capital requirements.

Our private banking is our unique elite banking and wealth management service provided by a dedicated private banking team who commit to providing customers with a personalised and integrated service based on unique, long term relationship that allows us to partner with them to provide unparalleled quality advice and unprecedented levels of our customer service.

For example, private banking customers get a waiver of minimum balance and other fees, offsite account opening and management at their home and/or office, free account opening and waiver of maintenance fees, preferential interest rates, specially designed personal and business passbook(s), increased daily ATM withdrawal limits (up to US$5,000), prioritised customer service, a fully cash-secured overdraft facility on request, unlimited over-the-counter deposits and withdrawals.

We also have interest bearing deposit accounts for financial institutions, a unique range of interest bearing deposit accounts that offer highly attractive and preferential returns on investments made by financial institutions. These targeted, customer-centric accounts are serviced by a dedicated relationship management team, who are specially trained to serve banking professionals.

What would you like the public to know about MARUHAN Japan Bank?
We have superior and unprecedented levels of service. We classify ourselves as experts in ‘relationship banking’. This means we focus on providing our customers with unparalleled standards of service, performance and global reach. We take the time to know customers and tailor everything to their individual needs. Each customer has an experienced member of staff to take care of their needs that they can contact at any time and who will be familiar with their financial and banking history, financial aims and needs and who is ready to deal with whatever they need immediately. We have already set new industry standards in this area since entering the market and are committed to continuing to drive up standards of customer service.

ASEAN Strategy – In the last 12 months we have launched our ASEAN FINANCIAL BUSINESS NETWORK with MARUHAN Group overseas network offices in Myanmar, Lao PDR and Singapore. We now have a strong presence as a sophisticated financial services provider across the ASEAN region and are the only international banking group to have this kind of financial business service network in ASEAN. We see ourselves as an industry pioneer and are serious about continuing to deliver on the promise we have made to revolutionize the ASEAN banking industry. By 2015, when the ASEAN member nations have fulfilled their commitment to improve economic integration between the member countries, we plan to serve the new, inter-connected ASEAN region as the established leader in its financial sector.

We are the first ever Cambodian commercial bank to have a microfinance business partner (Sathapana Limited) within our Group of companies, and we believe this represents a significant step towards the breaking down of long standing barriers between the commercial banking and microfinance sectors and are proud to be the bank taking that first step.

Is the Cambodian branch part of a larger MARUHAN Japan Bank in Japan? How big is it, and what is its main business?
We are not a branch of Japanese Bank; we are a 100 per cent local Cambodian-licensed bank and our head office, in Phnom Penh, is staffed by expert Japanese and Khmer banking professionals.

MARUHAN Japan Bank is part of the Japanese MARUHAN Corporation Group.

What sectors of the Cambodian economy do you see as interesting and exciting?
We are encouraged that Cambodia’s economy continues to record solid growth and that GDP continues to accelerate. Garment exports and the tourist, real estate and construction sectors are all causes for optimism. We also expect to see increases in agricultural product exports; especially rice, rubber and maize, following the high priority put on the agricultural sector by the government.

Do you have an extensive loan portfolio and if so, what sectors do you like to lend into?
As well as personal loans to our private customers, we lend extensively to a wide range of industrial sectors and we work hard to ensure we have balance of sectors across our loan portfolio (i.e. the educational, agricultural predominantly rice millers/importers/exporters), medical, manufacturing, hotel and construction sectors.

How many people work at MARUHAN Japan Bank in Cambodia?
There are approximately 100 people working directly for MARUHAN Japan Bank and an additional 1800 officers at MFI Sathapana which is a member of the MARUHAN Group.

What plans do you have for expansion?
ASEAN Strategy – Through our ASEAN FINANCIAL BUSINESS NETWORK, we plan to continue the expansion of our commercial banking and MFI networks throughout the ASEAN region; so that, by 2015, when the ASEAN member nations have fulfilled their commitment to improve economic integration between the member countries, we are ready to serve the new, inter-connected ASEAN region as the established leader in its financial sector.

What kind of customers are you seeking and what kind of services you can do for them? In other words, how do you differentiate from other banks?
We are targeting commercial clients from the educational, agricultural (predominantly rice millers/importers/exporters), medical, manufacturing, hotel and construction sectors for business products and are also targeting the owners and staff of the same businesses as personal banking customers as well as students to offer them first bank accounts.

As well as the superior (unprecedented) levels of serviceand relationship banking strategy that we have in place, and which I outlined earlier, we are industry innovators and have committed to revolutionising ASEAN banking industry. In another step towards delivering on this promise, we are now on the way to launching our ground-breaking, highly sophisticated e-banking services – which I am proud to say will be the first internet banking system in Cambodia to offer full global functionality! This will be rolled out alongside the most sophisticated, global foreign currency (FX) services in Cambodia.

CIMB features special preferred customer privileges

2013-07-11T21:26:00.002-07:00

Asean-focused CIMB Bank is offering special “preferred customer” status for depositors of $50,000 or more, according to Head of Strategy and Finance Heng Vuthy.

As a preferred member, Heng Vuthy said, the customer will get exclusive services and benefits locally and regionally such as a dedicated Relationship Manager, free access to airport lounges in ASEAN, pre-arrival account opening in ASEAN countries, special discounts at high end hotels, shops and restaurants in ASEAN, access and same recognition at all CIMB Preferred Centres in ASEAN, and more.

“Our preferred centre serves our preferred clients differently from the normal client and you also have a relationship manager; you’re served first and you have privileged rates and other benefits.”
Heng Vuthy says the idea is to target the affluent people in the marketplace.

“We would like high profile people like the CEOs of the companies and so on. Expats are also our target here, who travel in the region and we are also looking for Cambodians of a high profile, who may be sending their child to study in Singapore or Australia. We also have an office in Australia.”

A local Cambodian, who has been given big responsibility in the Malaysia-headquartered CIMB Bank, he was born in Phnom Penh in 1981 and has worked for a number of qualifications including a master’s degree in finance, previously worked at ACLEDA Bank for eight years before joining CIMB in August 2010.

“One of our key differentiators for CIMB is our multi local business model. Our regional model enables us to fully leverage the reach and scale of our Southeast Asian platform while preserving aspects which identify us to the local population,” Heng Vuthy said.

“If you look at the banking landscape of Cambodia, a lot of banks will have a lot of ATMs. For us we also try to see something we can bring to Cambodia for regional leverage of ASEAN. One of the keys is a wealth management product,” he said.

CIMB has linked ATMs in five countries as a regional network so far in Cambodia, Thailand, Malaysia, Singapore and Indonesia.

“Next will be Philippines and Vietnam and then ultimately all 10 ASEAN countries,” Heng Vuthy said. “With this regional ATM link, CIMB customers can access to more than 5,000 ATMs across the five countries free of charge and they can get the local currency as they withdraw the money. The conversion rate will be better than at the counter.”

Other differentiators for CIMB are that they were the first bank to launch a dual currency investment (DCI) services and a service whereby customers deposit in US dollars and they have a passbook that records the amount they have according to the price of gold.

CIMB also offers foreign currency accounts in Australian dollars, Euros, Japanese Yen, New Zealand dollars, British pounds, Singapore dollars, Thai Baht and Cambodian Riel.

“For DCI the customer can choose whether they want good conversion rate or high interest rate for this pair of currency. With this product we need at least $25,000 to start with. That’s why we target a more affluent client,” he said.

CIMB has 1,100 branches in 17 countries including China, the UK, India, Sri Lanka, Taiwan, Korea, Brunei and Bahrain. Here in Cambodia, CIMB has 11 branches, with seven in Phnom Penh and branches in Siem Reap, Sihanoukville, Battambang and Kampong Cham.

There are also 11 offsite electronic banking centres – consisting of ATM, Cash Deposit Machine, and Cheque Deposit Machine, 10 in Phnom Penh and one in Siem Reap.

As for expansion plans, CIMB in Cambodia has already created 11 branches since 2010 and has a strategy of growing those offices first before adding additional branches, but they will add some electronic banking centres.

CIMB also offers tier rate savings accounts, mortgage financing, interest-paying current accounts, business loans, and overdraft and trade finance facilities.

“In the near term we are looking to capitalise on this and building our customer base and growing them. For the near term we are looking at especially focusing on SMEs, the mass affluent market and the growing of the mass-affluent-to-be. And in the long term, we are looking at deploying investment banking.”

Heng Vuthy says CIMB has “investment banking blood” owing to the bank’s background, something to watch for in the future.

“The CIMB group acquired a lot of commercial banks in Indonesia, Thailand and Malaysia and quite a number of commercial banks.”

CIMB Bank PLC has 170 employees, grown from 30 when Heng Vuthy joined in 2010.

“We focus on the sales organisation, training and sharing sessions.”

The CIMB view for the Cambodian economy is very upbeat, he said.

“There is still a lot of op to grow in Cambodia. As reported from World Bank, only less than 10 per cent of the population has a bank account. Cambodia is a very young population, mostly under 30 years old and we can see a mass affluent growth in the market.”

For the banking industry, Heng Vuthy thinks the National Bank of Cambodia’s annual report tells the story.

“For last five years in the NBC annual report the growth rate has always been 30 per cent and above. You can see also with the ATMs and cash deposits, the population is not shy to accept these new technologies.”

CIMB’s Heng Vuthy answers questions about products, currencies and interest rates

How many branches does CIMB have total?
CIMB Group has more than 1100 branches across 17 countries (Malaysia, Indonesia, Thailand, Singapore, China & Hong Kong, Vietnam, US, UK, Brunei, Bahrain, Myanmar, Cambodia, India, Sri Lanka, Australia, Taiwan, Korea)

How many branches in Cambodia?
There are 11 branches in Cambodia; 7 in Phnom Penh and 4 more in Siem Reap (Tourism Area) city, Sihanouk Ville city (International Port), Battambang city (Rice Mill Area), and Kampong Cham city (Rubber Plantation Area) and 11 offsite self-service terminal and continue growing.

When did CIMB first open in Cambodia?
CIMB Bank PLC commenced operation in Cambodia in November 19, 2010 with the opening of a first branch of commercial banking in the heart of Phnom Penh city.

What currency accounts can people have at CIMB?
USD, EUR, JPY, AUD, NZD, SGD, GBP, THB, and of course KHR.

How do you differentiate CIMB in the marketplace from other banks?
One of our key differentiators is our multi-local business model – which we have successfully implemented across our ASEAN franchise and which we do the same in Cambodia. Our regional model enables us to fully leverage the reach and scale of our Southeast Asian platform while preserving aspects which identify us to the local population, allowing us to understand and cater for their specific needs. For example, we strongly believe in the empowerment of local leadership and the development of products and services which are familiar to local cultures and practices. In doing so, we hope that the population will treat us not as a foreign bank, but as a local bank with regional resources.

In term of products; on top of our basic deposits, loans, and trade facilities we are continuing introduce wealth management/investment products for our growing affluence customers. Eg DCI (first bank) and GDA.

In term of services; in 2012, we invested in our core-banking system for trade finance module; which has the ability to enhance our customer service capacity, thus improving value for customers.

We launched our preferred banking and regional ATM service, which is another regional benefit for our existing and potential customers, enabling them to enjoy our CIMB Group’s ASEAN network and regional ATM network of more than 4,800 ATMs across the region with no service fee charged.

Recently early 2013, CIMB Bank PLC became the first bank certified by ISO 9001:2008 for its customer services. The evaluation process on our customer service process including account management, counter operation, business continuity plan other processes have been conducted by Guardian Independent Certification (GIC), a United Kingdom Certification Body. This is to ensure that we have a proper as well as consistence procedure in place for our customer services and business continuity plan across our 11 retail branch networks.

What are your expansion plans for Cambodia?
Our commitment to and investment here as reflected by our rapid deployment of branches speaks for our confidence in the growth prospects in Cambodia. We rolled out 11 branches in our first two years of operation complemented by a network of offsite self-service terminals and continue growing.

With our infrastructure, human capabilities and branch network in place, complemented by the full range of products and services [from tiered rate savings, mortgages, Preferred Banking, interest paying current account and business loans and overdrafts to trade finance], we are now in a position to grow our customer base as well as better understand their banking needs.

What kind of loans do you provide? Property? Automobile? Business?

Business term loan to finance business capital investment (CAPEX) as we as OPEX.
Personal term loan to finance personal needs including automobile and so on.
Housing loan to finance residential property (which offering with more flexibility for our client in term of security, repayment etc).
Overdraft for our customers’ working capital financing, and
Trade finance facility to facilitate across border trading activity.

What kind of customer is your target customer?
For the near term, we will focus on building up our commercial banking franchise focusing on SME and mass affluent and mass affluent ‘to be’ individuals. In the longer term as the Cambodian economy developed, we will explore other financial services e.g. investment banking, etc in line with and as part of CIMB’s universal banking platform.

Do you have any new products and services you would like to talk about?
DCI product – to facilitate our customer who need foreign currency in the future to save with us and as of yesterday USD-JPY DCI we pay 26 per cent pa.

FCFD – is another alternative saving/investment for customers who holding or using currencies other than USD; we pay AUD 5.5 per cent pa.

Trade Finance – We have deployed TF module in our core-banking system to smoothen our customer service.

Flexible Housing Loan: three options for customers to maximize their needs with a high margin of financing, fast approval process, lower costs and they will be able to get a bigger house with gradual incremental repayments.

What’s your opinion on the Cambodian economy? Does the future look good? Why?
We are positive on Cambodia in view that it is relatively under-banked as per a recent World Bank report which states that only 4 per cent of the population has a bank account, has a very young population averaging less than 30 years old and most importantly, a rapidly developing economy facilitated by open and progressive government policies.

Growing acceptance of banking services and products as reflected by the rapid growth in deposits and loans averaging over 30 per cent annually over the last 5 years in the banking industry; in addition, Cambodian consumers are not shy to adopt new products and services as reflected by amongst others the rapid expansion and adoption of self-service terminals. This is further facilitated by a very progressive and supportive National Bank of Cambodia.

Success factors for Campu bank reflected in its leadership style

2013-07-11T21:25:00.002-07:00

One of the reasons Cambodian Public Bank has been successful is the strong corporate governance and policies advocated by Public Bank Group chairman, Tan Sri Dato Sri Dr Teh Hong Piow, who just celebrated his 83rd birthday on March 8 in Kuala Lumpur.

Campu Bank Country Head Phan Ying Tong says the chairman is beloved by both employees and the public, a sentiment he says has enabled the bank to grow over the years.

“We love a boss like him: generous and always rewarding.”

Another of the chairman’s contributions is a culture of rewarding people who turn in good performance, according to Phan.

“One very important quality of Tan Sri’s leadership is he rewards people who can perform; who achieve results. So that shapes the culture of the bank.”

Phan says that the culture goes right through Public Bank and its Cambodian subsidiary, Cambodian Public Bank, also known as Campu Bank.

Phan says a good culture will ensure that any organisation will go in the right direction and consistently perform.

“We are talking about our responsibility. This is a culture that has been inculcated into the staff. Everyone takes up their own responsibility and is happy doing their job responsibly. Everyone has a goal to be efficient and achieve the goals set by the chairman, and at the end of the day, they are handsomely rewarded,” Phan said.

“We inculcate a performance-based culture where rewards are correlated to the delivery of superior performance and we pay good bonuses, grant overseas trips for all levels of staff and we offer career paths and advancement.”

Phan said the meritocracy-driven career progression coupled with priority accorded to internal filling of vacancies by existing well-trained, qualified and experienced staff have created a workforce that is passionately performance driven.

“Our people are seeking career paths and advancement within the bank. This is evident from the low staff attrition rate of 7 per cent in 2012 and 100 per cent of our managerial appointments were promoted from within Campu Bank.”

In 2012, Campu Bank earned $35 million in before-tax profit, up more than $5 million from 2011.

Phan thinks that the trend will continue because of the good fundamentals of the Cambodian economy.

“I think Cambodia’s economy will continue to do well with GDP growth of not less than 6.5 per cent in 2013. A lot of foreign investors continue to come in possibly because doing business elsewhere is getting more costly like in China and also due to the favourable conditions and incentives offered by the Government” Phan said.

“We also see in Cambodia more Japanese-owned manufacturing companies coming in a big way. May be Cambodia is beginning to see a change from the traditional garment and textile based economy to a more technology based economy.”

He gave the example of the Japanese-owned Minebea Company which manufactures small motors at the Phnom Penh Special Economic Zone.

“I think Cambodia is starting to move into a more technology-based direction and not so much a labour-intensive base economy in the long term.”

Phan said the development of a technology-driven manufacturing base is complimented by the parallel development in the construction and real estate sectors as well as the agriculture and rice sector.

“The prime minister is now talking about rubber and I think this is a very good choice to promote the economy given the suitable climate of the country. We don’t just rely on just one agriculture product to grow the economy.”

Phan says there is more and more competition in the banking sector which is getting keener than other sectors today.

Phan says bankers need to maintain a high degree of professionalism to ensure that loan borrowers make a more informed decision. For example, borrowers should be advised as to how much they should borrow based on the actual business needs or private investments required and not to over or under lend to the borrowers.

With more competition coming into play through entry of new banks and opening of new branches by existing banks, bankers should not sacrifice asset quality for quantity otherwise they would be saddled with bad asset quality which will translate into bad debts.

Campu Bank has 25 branches throughout Cambodia and Phan says there are plans to open more branches in strategic and viable locations.

“We will continue to expand and of course, we will continue to enhance our human capital which is still a challenge in the industry. When you want to open more branches, you need to have the right managers, skilled and experienced staff especially in credit and marketing and so on.”

Some of the coming plans are introducing children’s savings accounts to inculcate savings habit for parents on behalf of their children and also to launch “Customer Care Campaign” to create greater awareness on the importance of good customer services this year as well as ongoing introduction of more promotions for credit card products from time to time.

“For example, we will continue with our tie-up programs with merchants to offer special discount to our cardholders,” Phan said. “For example, at Almond Hotel you can get 10 per cent discount for food and beverages spent at the restaurant.”

Another of Campu Bank’s plans is to roll out instalment plans for purchase of consumer and household goods including computers and electrical items but card holders only need to pay by instalments with no interest being charged for the instalments.

Campu Bank will announce the “Merchant of the month” on their website to inform customers where they can get more value for their credit or VISA debit cards.

Another deal is with Sime Darby Medical Centre from Malaysia whereby a very special discount on medical fees will be offered to its Platinum card holders.

Campu Bank employs more than 600 people and is among the top three banks in Cambodia in terms of asset size, business and performance, Phan says.

In 2012, Campu Bank was awarded “Domestic Retail Bank of the Year in Cambodia” for its management excellence by Asian Banking & Finance. Also in 2012, Deutsche Bank awarded Campu Bank the “USD Straight-Through-Processing Excellence Award” for exceptional quality in the processing of payment messages.

Phan expresses optimism in Cambodia’s economic growth for the next few years for a number of reasons, including increasing interest shown by Cambodians to own affordable homes.

“We are seeing more developments in the Special Economic Zones especially in Phnom Penh, Preach Sihanouk, Koh Kong and Bavet, infrastructure developments in the construction of hydro-power dams and stations and bridges, reconstruction of railways and rehabilitation of the roads linking the key routes for transport and export of goods.

Phan says he’s optimistic about the health of Campu Bank subsidiaries Campu Lonpac Insurance and Campu Securities which he says will also benefit from the favourable economic conditions and development.

“We see more business activities, more flights coming into the country by new carriers, more tourists, and more investors. We hope that the government will continue to promote its liberal business policies and improve the investment climate to make Cambodia one of the most “business friendly” countries in the region which would enhance employment opportunities and improve human capital in the long term.”

Phan complimented the National Bank of Cambodia for regulating the banks efficiently and also for implementing sound monetary and fiscal policy prudence to promote macroeconomic stability, as well as the CDC.

“We appreciate the Council for the Development of Cambodia for their active role and competence in promoting competitive and attractive tax incentive program to attract new foreign investments into the country,” he said, citing the granting of tax exemptions for three years each time for a total of nine years.

Another factor in the improvement of Cambodia’s financial landscape, Phan says, has been the introduction of the capital market under the supervision of the Securities Exchange Commission of Cambodia in 2011.

“The capital market has provided opportunities for business enterprises to raise capital for their business expansion in Cambodia. Campu Securities is principally involved in securities trading and underwriting,” Phan said.

One of Cambodia’s challenges today, Phan says, is to nurture and strengthen human capital.

“Human resources make a difference in productivity if you have skilled and knowledgeable staff in every sector of the economy. It is a priority for all sectors of the economy to intensify efforts to build up a strong human capital in Cambodia.”

Phan was happy to have recently completed the Masters degree in Banking from the University of London, with the support of his company and his family. He said it was an example of the importance of training for people at all levels.

“Learning is the spring board an employee stays abreast with new skills and knowledge, embrace the inevitability of change as well as sustain its relevance.”