The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian Development Bank

Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of
the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with
ADB official terms.

National Bank of Cambodia Riel. Stability. Development.

 SME Finance in Cambodia

Presented by Mr. Heng Bomakara

National Bank of Cambodia
29 October 2018
Bangkok, Thailand.

The views expressed in this presentation are those of the author and do not
necessarily represent the views of the NBC.

National Bank of Cambodia Riel. Stability. Development. 2

 Challenges

SMEs are less likely to be able to obtain bank loans than large firms;
instead, they rely on internal funds, or cash from friends and family, to
launch and initially run their enterprises. About half of formal SMEs
don’t have access to formal credit. Overall, approximately 70% of all
micro, small and medium-sized enterprises (MSMEs) in emerging
markets lack access to credit.

Source: The World Bank, https://www.worldbank.org/en/topic/smefinance

National Bank of Cambodia Riel. Stability. Development. 3

 Challenges

Source: International Finance Corporation European Union- “Understanding Cambodian

Small and Medium Enterprise Needs for Financial Services and Products”

National Bank of Cambodia Riel. Stability. Development. 4

 SMEs in Cambodia
With SMEs accommodating for around 40% to 50% of total
employment in the Kingdom, these businesses play an important
role in job creation, generating income for low-income
individuals and vulnerable populations and fostering economic
growth, social stability, and contributing to growth of a dynamic
private sector as well. There are more than 500,000 SMEs
covered in various sectors including agriculture, manufacturing,
trade and service.

National Bank of Cambodia Riel. Stability. Development. 5

 Credit by sector
Rental and Operational
Transport and Leasing Activities
Utilities Storage Credit Cards
Financial Institutions 0.7% 2.4%
2.0% 0.2%
3.7%
Mining and Quarrying
Other Lending 0.3%
1.3% Retail Trade
Information Media and Owner-Occupied 17.4%
Telecommunications Housing only
0.8% 9.5%
Wholesale Trade
Real Estate Activities 11.3%
7.1%
Hotels and Restaurants
4.8%
Agriculture, Forestry
and Fishing
9.6%
Other Non-Financial
Personal Lending Construction Services
7.6% 9.0% 6.7%
Manufacturing
5.4%

* Gross Loan included FI loan and

Source: National Bank of Cambodia

National Bank of Cambodia Riel. Stability. Development. 6

 Credit to SMEs
3% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 1% 1% 1%
100%
90%
80%
70%
60%
50%
40%
72% 71% 71% 70% 70% 70%
30% 75% 74% 74% 73% 73%
76% 75% 76%
20%
10%
22% 22% 22% 23% 22% 24% 25% 25% 27% 27% 28% 28% 29% 29%
0%

Consumer Loan Small Business Others

Source: Credit Bureau Cambodia (CBC)

National Bank of Cambodia Riel. Stability. Development. 7

 Lending Criteria
30.0%
27.0%
25.5%
25.0% 23.6% 23.0% 22.0%
19.0% 20.0%
20.0%
16.4%
14.5%
15.0%

10.0% 9.0%

5.0%

0.0%
Collateral Business plan Guarantee Borrower Others
capacity
Banks MFIs

Source: National Bank of Cambodia, 2016. Research paper on Agriculture Financing.

https://www.nbc.org.kh/download_files/research_papers/english/Agriculture_Financing_
in_English_VENG.pdf

National Bank of Cambodia Riel. Stability. Development. 8

 Bakong Project
What is Bakong?

 Bakong is the backbone for real-time retail payment in

Cambodia.
 Bakong connects FIs and payment providers together.
 Bakong enables participants to provide service to their
end users directly from payment gateway/client module.
 Bakong allows end users to make transactions (send, pay,
deposit, and receive) through NBC generic app or/and
participants existing app.

National Bank of Cambodia Riel. Stability. Development. 9

 Bakong Project
What can Bakong project do?
Promote the use of electronic
Collect physical cash into the system
Decrease demand for physical cash
Provide an advance payment
infrastructure
Make deposit/loan with FIs
FIs may play the role as KYC agents
distribution channel
FIs may attract more users with the
price
National Bank of Cambodia
Each participant (Financial institution)
needs to register at central bank to
obtain permission to join the network.
After successful register with Bakong,
participants can top up their money to
their Bakong settlement accounts.
Participants can send money to each
other via Bakong Desktop app.
 Each participant can create accounts
for it customers (users)
 Participants are responsible in
managing their customers’ accounts
(including KYC)
Riel. Stability. Development. 10
 Bakong Project
How it work?
1. Send
2. Pay
3. Deposit
4: Receive

National Bank of Cambodia Riel. Stability. Development. 11

 Credit Infrastructure
 Credit registry - public
 Credit bureau – private
 Credit guarantee programmes
 Collateral: law, use, and resolution
 Securitization and factoring
 Secured (moveable) assets registry
 Dispute resolution mechanisms

National Bank of Cambodia Riel. Stability. Development. 12

 Digital Finance

 Develop alternative of funding tools, such as P2P lending

 Impact on trade finance, supply chain finance and money

transfer through technology development

 Support on credit risk analysis of SMEs

National Bank of Cambodia Riel. Stability. Development. 13

 What is the next steps?

 SME Big Data

 Credit Infrastructure

 Regulation on Fintech

 Financial Literacy

 Cooperation between related institutions

National Bank of Cambodia Riel. Stability. Development. 14

 Thank You!
Email: hbomakara@nbc.org.kh

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