Cambodia’s financial inclusion remains timid despite high economic growth

Chea Serey, Director General of Central Banking of NBC, delivering a keynote address at the International Money Museum Conference on ‘The New Era of Financial Education’ in Hungary. Facebook

Financial inclusion in Cambodia remains timid even as the country’s Gross Domestic Product (GDP) at 7 percent per year on average has been an outstanding economic growth for the past decade, while the financial system has been developed and modernised rapidly as 30 percent of the adult population have completely excluded from financial services, a senior banking official said.

Cambodia’s financial inclusion remains timid with 67 percent of the adult population having access to formal financial services, while 3 percent to informal services—a decrease from 12 percent in 2017, according to the official in charge of central banking of Cambodia at the National Bank of Cambodia (NBC).

Chea Serey, Assistant Governor and Director General of Central Banking of NBC, delivering a keynote address at the International Money Museum Conference on “The New Era of Financial Education” held recently in Hungary said that even though the central bank launched a flagship campaign titled “Let’s Talk Money” in both digital and physical format, only the young population have been reached mostly.

“But we are mindful that while this method can reach the young population, the older ones and those living in remote areas may not be able to access the information. In this regard, we continue to use face-to-face methods and gathered villagers and conduct face-to-face seminars. We also printed out coloured cartoon booklets to distribute to children in rural areas so they can learn and share the knowledge with their parents,” Serey said.

Since 2010, many public awareness workshops and public gatherings were organised but it was not until 2016 when the campaign was launched to try to bring all of the industry and central bank’s financial literacy efforts under one umbrella to better coordinate and avoid duplication, she said.

To capitalise on the high mobile phone penetration of 124 percent, a young and tech-savvy population and 10.8 million Facebook users out of 16 million inhabitants, NBC—Cambodia’s monetary authority–launched short videos contents on social media, collaborating with mobile service operators to include short important messages on financial matters at a press of a button, using mobile application to spread the messages.

Cambodia has 50 percent of its population are under 25 years old and need to be provided with the necessary information to access and use financial services surely and effectively in the future through financial education that NBC has offered in the national curriculum for primary, secondary and upper-secondary schools in partnership with the Ministry of Education, Youth and Sport.

“In addition, we also have partnered with the private sector to publish and disseminate comic books, youth-friendly social media content and even mobile phone text-message content to be widely disseminated throughout the country,” Serey said, adding, that another important target group for the financial education is women.

Serey said that NBC has also partnered with the Ministry of Women Affairs and Cambodian Women Entrepreneur Association (CWEA) to support women’s financial and entrepreneurial skills that would enable them to access formal financial services and use them responsibly, which consequently contribute to the household and community social and economic development.

“If we take the view that financial education has a role to play in shaping tomorrow’s society, these two groups should in my opinion be the main target beneficiaries [as] children … are the future of our country and women, their empowerment is key to achieve an inclusive and balanced socio-economic development,” said Serey, who is also a vocal proponent for greater use of the local currency to promote the country’s greater independence on economic and monetary policy.

Cambodia is a highly dollarised economy with the national currency representing only 10 percent of bank deposits and 16 percent of the money in circulation as the economy has been dominated by US dollars corresponding to at least 75 percent of the country’s GDP since the early 1990s, while it has contributed to reassure and attract a large pool
of investors in the country.

NBC has undertaken a series of communication programs to raise awareness and progressively build the trust of the people in using Cambodian riel instead of the US dollar with a strong foundation already in place, namely a stable exchange rate and the low inflation rate over the last 23 years, according to Serey, who has been leading the Bakong Project, an initiative of the National Bank of Cambodia in exploring and introducing a new generation of payment systems using Blockchain technology.

“This forced marriage between our economy and a currency we have no control over is nonetheless impacting our sovereignty and ultimately our ability to withstand financial shocks as it limits the efficiency of our monetary policy,” she said, adding, that NBC has continuously organised workshops, public events and celebrations throughout the 25 provinces to raise awareness of the national currency during the annually “Riel Day” celebrations along with other more frequent and regular occasions.

Serey also said that every initiative launched by NBC for financial education has been conceived and undertaken in collaboration with relevant government agencies, development partners, professional associations and private firms such as the Association of Banks in Cambodia (ABC) and the Cambodia Microfinance Association (CMA) who has an extensive network in the rural areas, while Cambodia Association of Finance and Technology (CAFT) in the increasingly defining role played by technology in financial inclusion and capacity building.

Source: Khmer Times