Types of Banks in Cambodia
There are three types of banks in Cambodia – Specialized, Commercial and Micro Finance Institutions (MFIs). Here’s a quick overview of how these banks differ and how they might help you.
How is banking system structured in Cambodia?
- All banks, whether Specialized, Commercial or Micro Finance Institutions (MFIs), operate under the umbrella of the National Bank of Cambodia (NBC), which registers, licenses and regulates them.
- The Ministry of Economy and Finance as well as the National Bank of Cambodia (NBC) regulate banks and banking services. The Association of Banks in Cambodia (ABC) represents the banking sector to the Royal Government of Cambodia and the ASEAN Bankers Association. The International Monetary Fund (IMF) and World Bank also operate in Cambodia. Banking is legislated primarily by the Law on Banking and Financial Institutions (LBFI).
Who the biggest banks currently in Cambodia?
- The top four banks, which together have a combined market share of around 65% (based on loans outstanding), are ACLEDA, ANZ Royal, Cambodia Public Bank (CAMPU) and Canadia Bank, with the rest of the market shared between the other banks, of which there were 43 at the time of writing.
Tell me more about specialize banks in Cambodia?
- A Specialised bank, according to the Law of Banking and Financial Institutions (LBFI), carries out one of the following three activities:
- 1) The collection of deposits from the public that are considered “non-earmarked”;
- 2) Credit operations such as leasing, commitments and;
- 3) Guarantees under signature, all of which are deemed valuable considerations.
Tell me more about commercial banks in Cambodia?
- Commercial banks in Cambodia offer a broader range of services, catering to the requirements of individual and corporate customers.
- Local incorporated banks are required by the NBC and LBFI to have a minimum of $37.5m of capital or a shareholder with a rating of “investment grade” from an independent rating agency.
- Commercial banks offer a wide range of services for individual and corporate customers.
- To set up a bank account in Cambodia, make sure you bring the correct documents.
- These vary but generally include a minimum of a copy of the applicant’s ID card or passport, proof of address and proof of income.
- Corporate accounts require more documents, and will depend on the bank’s specific requirements.
- Individual services include chequing and savings accounts and foreign exchange services.
- Some also offer credit cards, overdraft facilities and personal loans.
- Several banks now offer a payroll management service, saving customers time by allowing them to process payments directly to employees.
- Online banking services are also improving in leaps and bounds.
- Increasingly, multinational banks are encouraging wealthy Khmers to invest in more liquid financial assets, as opposed to investing solely in land.
- While these markets continue to grow, continuing education is needed from banks and financial consultants to alter conservatism towards the international finance market.
- As ASEAN takes form this year, more and more banks are attempting to offer region-wide services, allowing banking tools and funds to be accessible to business people across a number of ASEAN countries, if not all.
- This drive is likewise ensuring banking codes of practice and ethics are being standardized across the region, benefiting Cambodian banking practice significantly.
Tell me more about Micro-finance institution (MFI) in Cambodia?
- There are over 40 MFIs in Cambodia.
- MFIs service poor and low-income families, individuals and small institutions by providing micro-credit in the form of loans and other financial support.
- Cambodian MFIs performed particularly well last year, delivering an average return on equity of 22 percent, making Cambodia’s MFI sector one of the best performing globally.
- The sector has grown rapidly in recent years, with a 44% increase in loans in 2013. It grew from $1.3bn in 2013 to over $2bn in 2014, which is much faster than that of FDI, which grew from $1.3bn to 1.7bn in 2014.
- The largest 8 MFIs use reliable credit assessment and risk mitigation tools (use of credit bureau, personal cash flow assessment, repayment ratios on disposable income and use of funds). However, smaller and unlicensed MFIs are not using them.