Cambodia Diagnostic Report 2017 PARTNERING for a COMMON PURPOSE Making Access Possible (MAP) Is a Dialogue on Financial Inclusion
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Making Access Possible Cambodia Diagnostic Report 2017 PARTNERING FOR A COMMON PURPOSE Making Access Possible (MAP) is a dialogue on financial inclusion. inclusive financial sector growth. At multi-country initiative to support The global project seeks to engage country level, the core MAP partners financial inclusion through a process with various other international collaborate with government, other of evidence-based country diagnostic platforms and entities impacting key stakeholders and doors to ensure and stakeholder dialogue, leading to on financial inclusion, using the an inclusive, holistic process. the development of national financial evidence gathered at the country This report was produced by beed inclusion roadmaps that identify level. The MAP methodology and in association with Cenfri. MAP key drivers of financial inclusion process have been developed jointly Cambodia was funded by United and recommended action. Through by UNCDF, FinMark Trust (FMT) and Nation Capital Development Fund. its design, MAP seeks to strengthen the Centre for Financial Regulation and focus the domestic development and Inclusion (Cenfri) to foster Contents Abbreviation and Acronyms ......................................................................................................................... 5 INTRODUCTION ............................................................................................................................................. 3 In Brief ........................................................................................................................................................... 7 Financial access in Cambodia ........................................................................................................................ 8 SNAPSHOT: THE CAMBODIAN CUSTOMER ................................................................................................... 9 Context drivers of market development .................................................................................................... 12 Regulatory and policy context in the financial sector ................................................................................. 28 Target Market ............................................................................................................................................. 46 Providers ..................................................................................................................................................... 76 Product market ......................................................................................................................................... 104 Summary: financial service usage across the four product markets ........................................................ 219 Financial Inclusion Priorities ..................................................................................................................... 223 Bibliography ................................................................................................................................................... i Annex 1: List of regulation in the pipeline or undergoing amendment ..................................................... xii Annex 2 Member List of National Clearing System .................................................................................... xiv Annex 3: Table of regulatory authority and permissible activities ............................................................. xvi PARTNERING FOR A COMMON PURPOSE Making Access Possible (MAP) is a multi-country initiative to support financial inclusion through a process of evidence-based country diagnostic and stakeholder dialogue, leading to the development of national financial inclusion roadmaps that identify key drivers of financial inclusion and recommended action. Through its design, MAP seeks to strengthen and focus the domestic development dialogue on financial inclusion. The global project seeks to engage with various other international platforms and entities impacting on financial inclusion, using the evidence gathered at the country level. The MAP methodology and process have been developed jointly by UNCDF, FinMark Trust (FMT) and the Centre for Financial Regulation and Inclusion (Cenfri) to foster inclusive financial sector growth. At country level, the core MAP partners collaborate with government, other key stakeholders and doors to ensure an inclusive, holistic process. About MAP Cambodia MAP Cambodia represents a partnership between National Bank of Cambodia, UNCDF, FinMark Trust, Cenfri and the National Institute of Statistics for the Development of a Strategic Framework for Financial Inclusion in Cambodia. The National Bank of Cambodia is the Chair of the Inter-Ministerial Working Group on Financial Inclusion Strategy Formulation (IMWG-FISF) which govern the MAP Cambodia project. Note on the use of the FinScope Survey 2015: Within this document (unless otherwise referenced), demographic, income and financial usage data is obtained from the 2015 FinScope Consumer Survey. A summary report and presentation of FinScope Cambodia is available as a separate deliverable, and the FinScope dataset is available on request for future research at map.uncdf.org. The Report also uses data from the Annual Report of the National Bank of Cambodia (NBC) and the Annual Supervision Report of the NBC for the year 2016. This report was produced by beed in association with Cenfri. MAP Cambodia was funded by United Nation Capital Development Fund. Authors Sujeev Shakya, Sudip Bhaju, Subrina Shrestha, Raju Tuladhar and Rojesh Bhakta Shrestha Copy editing: In-country support and stakeholder coordination: beed management private limited Advisory inputs: Cenfri MAP Cambodia management, coordination and implementation: Kameshnee Naidoo, Rajeev Kumar Gupta, Ngin Hong USD/KHR Currency Exchange Rate The local currency in Cambodia is Khmer Riel (KHR). The United States Dollar (USD) equivalents shown throughout the document were calculated using a 12 month average exchange rate (as per the National Bank of Cambodia’s 2016 year-end statistics) of KHR 4055/ USD. Acknowledgements As the authors, we would like to extend our appreciation to all those who supported and assisted in producing this report. The NBC team provided guidance and support throughout the research process, as well as highly-valued feedback on our findings. The UNCDF team in Cambodia and NBC provided invaluable assistance in organizing meetings, assisting with research inputs and also provided key insights into the country. Finally, we would like to express our gratefulness to the various government stakeholders, financial service providers, associations, telecommunications operators and development partners, for meeting with us and providing their valuable insights which has guided and shaped this research. Abbreviation and Acronyms ACH Automated Clearing House ADR Alternative Dispute Resolution AIC Association of South East Nations Insurance Council AML Anti-Money Laundering APN Asian Payment Networks ASEAN Association of Southeast Asian Nations ATM Automated Teller Machines BFI Bank and Financial Institutions CAC Co-operative Association of Cambodia CAFIU Cambodia Financial Intelligence Unit CBC Credit Bureau of Cambodia Cenfri Centre for Financial Regulation and Inclusion CEO Chief Executive Officer CFT Combatting the Financing of Terrorism CRF Cambodia Rice Federation CSX Cambodia Securities Exchange DBI Doing Business Index DTF Distance to Frontier EBA Everything-but-Arms EDC Electricity du Cambodge EFT Electronic Funds Transfer EU European Union FASMEC Federation of Associations for Small and Medium Enterprises FAST Fast and Secure Transfer FDI Foreign Direct Investment FSP Financial Service Providers GDCE General Department of Customs and Excise GDP Gross Domestic Product HDI Human Development Index HDR Human Development Ranking HIV Human Immunodeficiency Virus IAC Insurance Association of Cambodia IFRS International Financial Reporting Standards IPD Insurance and Pension Department KHR Cambodian Riel LDC Least Developed Country LVP Low-Value Payment LVPS Large Value Payment System M2 Broad Money MAP Making Access to Financial Services Possible MDG Millennium Development Goals MFDI Micro Finance Deposit Taking Institution MFI Micro Finance Institutions MFSP Mobile Financial Service Providers MEF Ministry of Economy and Finance MOU Memorandum of Understanding MTO Money Transfer Operator NCAC National Commercial Arbitration Centre NBC National Bank of Cambodia NFV National Fund for Veterans NFV National Fund for Veterans NGO Non-Governmental Organizations NSSF National Social Security Fund NSSFC National Social Security Fund for Civil Servants PAP Phnom Penh Autonomous Port PoS Point of Sale PWDF Persons with Disability Foundation QAB Qualified ASEAN Banks RMF Revenue Mobilization Strategy ROE Return on Equity RTGS Real-Time Gross Settlement System RWSSH Rural Water, Supply, Sanitation and Hygiene SAP Sihanoukville Autonomous Port SECC Securities and Exchange Commission of Cambodia SEZ Special Economic Zone SMEs Small and Medium Enterprises SSS Shared Switch System UNCDF United Nations Capital Development Fund US United States USD US Dollar VSLA Village Saving and Loan Associations WEF World Economic Forum Executive Summary i. The Making Access Possible (MAP) study is based on the quantitative demand side data and qualitative supply side data. The demand side survey – FinScope (2015) was conducted during November 2015- January 2016, covering