The state of fintech in Cambodia
在线转账与手机支付平台Wing应该算是柬埔寨支付领域的一家领军企业。但是近来，另一家电信公司Smart Axiata也加入了竞争。今年早期，这家公司发布了手机转账和交易平台SmartLuy 和使用虚拟MasterCard的手机支付系统SmartPay，利用这个系统，客户可以直接在应用商店或者iTunes购买商品。有完善的电信网络作为基础，Smart必然势不可挡。
Chankiriroth Sim, 网络会计平台 Banhji 的首席执行官这样评价这一进展：
Christopher Loh, RHB银行的首席战略官表示，他们银行在柬埔寨的电子策略同其它地方的有所不同。
Cambodia’s fintech scene is more nascent than some other markets in Southeast Asia. But like many developing ecosystems, the touchpaper has been lit.
Strong economic growth. Cambodia can now boast more than two decades of growth. In 2015, the country attained lower-middle-income status. With this comes a growing middle class whose spending power and consumer behaviors give rise to a need for new solutions in payments, credit, and mobile technology.
Credit is available for those who want it. While hardly the most active regulator in the region, the National Bank of Cambodia (NBC) supports lending, and banks in Cambodia have continued to make credit available for consumers and companies in the country. When judged in terms of the ease of obtaining credit, Cambodia currently sits in the lofty position of 7th out of 190 economies overall. That placing is much higher than neighboring countries. It should inspire confidence among entrepreneurs to obtain financial means to take their companies forward.
Support is available for investors looking to invest in early-stage tech entrepreneurs. The Cambodian Investment Board (CIB) offers incentives for investors looking to support entrepreneurs that are starting businesses in specific fields: technology, job creation, exports, tourism, environmental conservation, and rural development. These include exemption from taxes, duties, and application costs.
100 percent foreign ownership is allowed. Unlike most of its neighbors, Cambodia allows 100 percent foreign-owned companies. Hopefully, this will incentivize foreign entrepreneurs to venture into the country and spark growth in talent and innovation within financial services.
Institutional and administrative sclerosis. Overall, the ease of doing business in Cambodia ranks very low: 131st globally. A lot of bureaucracy remains. It’s slow and expensive to set up businesses in the country, and the lack of an established and collaborative fintech ecosystem means that entrepreneurs often feel like they’re going at it alone, which inevitably leads to more busts and fewer breakthrough successes.
Regulatory uncertainty. Unlike other countries in Southeast Asia, the NBC’s regulatory strategy remains relatively disengaged with fintech companies in the country. At this stage, the best characterisation of NBC’s approach is perhaps “learning and observing,” which doesn’t particularly instill confidence in those early-stage innovators struggling to understand the boundaries of their playing field.
As ever, the lack of regulation in multiple areas in Cambodia can be categorized as either an opportunity or a hindrance, depending on your viewpoint. Skeptics will note that while NBC continues to stay on the sidelines, the regulatory grey zones will remain.
For many, the grey zones make taking a chance on an innovative solution unpalatable. They diminish development not just in the case of individual fintech firms, but more worryingly, for the collective ecosystem. This in turn does damage to the development of the financial economy in Cambodia as a whole.
Lack of a strong and established fintech ecosystem. The local ecosystem — of which Phnom Penh is the hub — is growing, but at the moment it can’t hold a candle to those seen elsewhere in Southeast Asia. The lack of local support, influencers, and opportunities for collaboration means that too often in Cambodia, good ideas are not exposed to the support, guidance, and partnerships that they need, and bad ideas are not killed quickly enough.
The current situation
First and foremost, the challenge in Cambodia is to bring retail banking consumers onboard. The scale of financial illiteracy in the country is significant, and there is a clear need to bridge educational and behavioral gaps in order to effect financial inclusion in the country.
The proportion of Cambodians with bank accounts is estimated at just 17 percent, and credit card penetration currently sits at just 30,000 cards across a country of 15.5 million.
There are a couple of hundred monetary financial institutions and private credit providers active in Cambodia. Yet the size, quality, and coverage of these organizations range wildly. In this highly fragmented market, they find it difficult to harness the potential of their collective offering to bring unbanked customers to the table.
Anecdotally, 4G coverage across the country is impressive, and the rate of mobile penetration is extremely high — estimated at between 90 to 130 percent. Notably, however, more than 50 percent of phone users are not using smartphones.
With a dispersed population and a dearth of brick and mortar bank branches outside of major cities, mobile promises to be the path to inclusion for a large segment of the country’s unbanked population. It’s no surprise then that fintech startups in the country are often payment gateways or core banking platforms that can bring customer-bank interactions entirely online.
The front runner for payments in Cambodia has long been Wing, which offers a money transfer and mobile payments platform. However, recently we have seen leading telecommunications company Smart Axiata enter the fray. Earlier this year, Smart launched SmartLuy — a mobile money service that allows mobile consumers to transfer funds and transact digitally — and SmartPay — a mobile payment system using a virtual MasterCard to instantly make purchases on App Store or iTunes.
Smart is in the enviable position of being able to leverage its well-established telecoms network.
Ecommerce is nascent in Cambodia
Similarly to neighboring countries such as Vietnam and Thailand, ecommerce promises to form the platform for a raft of fintech innovations in Cambodia. However, unlike these other countries, ecommerce in Cambodia remains nascent. There are difficulties with making payments online, delivery providers, and behavior: Cambodians are accustomed to paying with cash.
People are attempting to change this. In the space of just 24 hours, serendipity led me to meet a number of companies aspiring to be the Lazada, Carousell or Tokopedia of Cambodia. As with other markets, one factor that has held back the development of ecommerce is the lack of an established, reliable payment gateway for online purchases.
Beyond consumer commerce, another huge opportunity for fintech in Cambodia is peer-to-peer lending and alternative finance. We are about to see the first big move online of invoice discounting services in the country, following a well-trodden path globally of opening up streams of working capital to SMEs.
Chankiriroth Sim, CEO of cloud-based accounting platform Banhji, talks about this development:
“Since 90 percent of businesses in Cambodia are SMEs, bringing digital access to finance to Cambodia is very important. Technology can allow people to have more trust in cashless transactions, and that will really help the economy. It will open the door for numerous entrepreneurs to grow businesses in the country, and for Cambodia that can only be a good thing.”
A fintech ecosystem is coming up
The fintech ecosystem in Cambodia lags behind most others in Southeast Asia, but this is changing. Engaged institutional partners will add to the pace of growth for fintech, but while it’s doubtless a generalization, banks in the country typically have less developed digital strategies than others in the region. The reason is simple: until basic financial needs are met, there is little for the banks to gain by innovating on more sophisticated issues.
Christopher Loh, group chief strategy officer at RHB Bank notes, that his bank’s digital strategy in Cambodia looks different from what it is doing elsewhere.
“In Malaysia, we’re in a very different stage of development. We’re working to make the whole end-to-end system cashless, and we’re much further down the road in terms of collaborating with fintech startups. In Cambodia, we are hoping to partner with innovative startups, but the startups are at a different stage of development and that impacts the role that we can play in this market at this point.”
Cash-first-bank-absent customer behaviors are entrenched in Cambodia, and as a result of traditional (and prohibitive) tariffs for transferring money both between banks and even between branches of the same bank, there is a lack of trust in institutions among customers, and little appetite to engage with banks.
Banks need to start walking the walk in terms of offering significant value add to customers’ everyday lives.
Happily, we are seeing a real willingness from banks to do so. The financial sector has offered strong support to economic growth in Cambodia over the past few years, and the impact on the everyman has been significant. Domestic credit accelerated by 27 percent year-on-year in 2015.
With a population of 15.5 million, Cambodia sits at the lower end of the scale when compared with its Southeast Asian neighbors. In light of that, and given that Cambodia is likely to develop at a slower pace compared to the rest of the region, entrepreneurs there should think about developing for multiple markets right from the start.