Celebrating the revival of Cambodia’s national currency

KT: What was the initial reaction to the reintroduction of the riel 37 years ago?

 

H.E. Chea Chanto: The National Bank of Cambodia was reestablished on October 10, 1979 and the riel was re-introduced on March 20, 1980. Back then, the first reactions from the people were that they welcomed and rejoiced over the re-introduction of the riel after its disappearance for quite a long while because of the Pol Pot Regime. 
 

People used gold and rice for trading goods and that caused difficulties in their daily lives. At that time, Cambodia operated a one-tier banking system. The National Bank of Cambodia played three important roles as a central bank, commercial bank, and a national treasury for the government. Riel banknotes were printed and injected into the economy once again through the payment of salaries for government officials and provision of credit to the people in order to restore the country’s economic activities. 

 

KT: It was reintroduced within about 6 months of the reestablishment of the central bank. How was this accomplished so quickly?

 

H.E. Chea Chanto: Despite the re-introduction of the riel in a short time after the rebirth of the National Bank of Cambodia, it was successful. The success was thanks to technical assistance from our allies, the Union of Soviet Socialist Republics and Vietnam. The banknotes were, at that time, printed overseas and transported to Cambodia.
 

The banknotes were distributed across the country. The central bank, back then, did an outreach campaign to promote the newly printed riel notes. We reached out to local communities to show people and promoted the notes through government expenditure programs. 

 

PRASAC provides sound financial solutions for growing together

Cambodia’s economy has experienced tremendous growth over the last two decades, with the microfinance sector playing a crucial role. Besides being at a driver of the development of the nation’s economy, MFIs have also played a vital role in poverty alleviation. 
 

Both economic growth and poverty alleviation are key components of the government’s national development strategy. With support from the core policies of the Royal Government of Cambodia (RGC) and the National Bank of Cambodia (NBC) in particular, the Cambodian microfinance industry has grown significantly from year to year, expanding financial services to people who live in rural areas and contributing to rising living standards. 
 

PRASAC Microfinance Institution is a private company, not a state-owned institution. We aim to improve the living standards of rural people and contribute to sustainable economic development by being a financially viable MFI. With 22 years of professional experiences, PRASAC has grown exponentially, becoming the largest and most sustainable MFI in Cambodia in terms of business size, customer care, flexible and sound financial solutions, and a wide network of offices and ATMs. We have developed a modern, transparent and dynamic core banking system.
 

Plan to move bank ATMs criticized

Finance industry experts have hit out at the Phnom Penh governor after he threatened to remove ATMs from municipality land following an attempt to blow up a Canadia Bank machine on Saturday.
 

The explosion took place at an ATM in front the National Pediatrics Hospital in Tuol Kork district. The glass doors of the ATM booth were blown out and the keyboard of the machine was damaged, but the cash box remained intact and nobody was hurt in the incident.
 

Local media on Monday quoted Phnom Penh Governor Pa Socheatevong as saying the authorities must take action to prevent another similar incident.  

 

“ATMs should be pulled out of public areas unless they have security guards, otherwise they risk attracting robberies,” he said.  
 

“What happens if more ATMs are attacked? There would be chaos. Before that happens, we need to have a rethink of security at ATMs on public land.”
 

Micro-insurance access urged

Cambodia's finance sector should increase insurance accessibility to its smallest lenders to help protect against indebtedness at times of disaster, an industry expert said at a conference in Phnom Penh yesterday.
Speaking at the Hotel Cambodiana to an audience of industry representatives on rural entrepreneurship, Jaime Aristotle Alip, founder and managing director of the Center for Agriculture and Rural Development Mutually Reinforcing Institutions, said Cambodia’s microfinance institutions (MFIs) should move to the “next level” and offer more micro-insurance options to help protect micro-businesses from the burdens of loan default.
“If something happens to the entrepreneur and if they are insured for their life, then there will be benefits given to the family,” he said.
Micro-insurance products can help to cover a part or all of someone’s loan repayments in the event of death or loss of earnings from injury or disaster. MFIs partner with insurance providers to sell products to MFI loan customers.

Japan’s Orix to buy stake in Acleda

Japan-based financial services provider Orix Corporation will acquire a little more than six per cent of Cambodia’s largest bank, Acleda, the bank’s president and CEO confirmed yesterday.

The deal, representing the largest investment by a Japanese company in the local banking sector, has already been approved by the National Bank of Cambodia, Acleda president In Channy said, adding that “the process is almost complete”.

Channy described Orix, a leading leasing company in Japan, as “a strategic investor that can bring expertise”.

Orix is buying the stake because of Acleda’s capacity, Channy said, such as the bank’s subsidiaries in the country and its presence in Laos and in Myanmar.

Malaysian company selling its local bank

Malaysian financial services group Hwang-DBS Bhd is selling its eponymous bank in Cambodia for $40 million, the company has announced on the Bursa Malaysia.

“Disposal is in line with the objective of the company to exit the commercial banking industry,” the November 8 announcement said, referring to an agreement with Malaysian conglomerate Affin Holding Bernard to sell its investment banking business.

Acleda debuts its credit card

ACLEDA officially launched its first credit card on Friday as Cambodia’s largest bank eyes the country’s rising middle income bracket, president and CEO In Channy said yesterday.

“This is the right time for us to start this Visa credit card product. By 2020, Cambodia will change from the least developing country to a lower middle income country,” he said.

For ACLEDA, it’s a step up from the ATM and debit cards the bank already issues.

By the end of this year, Channy said ACLEDA hopes to have 700 customers using the product, which is still a fraction of the more than 15,000 users of credit cards in the country.

Channy, however, expects a rapid demand for plastic over the next 10 years, and said the ACLEDA card will be more accessible than what’s available in Cambodia.

“We can go with any client whose income is as much as $200,” he added, referring to conditions for obtaining one of the cards.

MFIs downplay debts

Two of the leading microfinance institutions (MFIs) in Cambodia said yesterday that they have identified a relatively small fraction of borrowers who were affected by flooding and would provide relief on their repayment schedules if necessary.

The comments come after both Prime Minister Hun Sen and members of the opposition Cambodia National Rescue Party called on MFIs to do more to help ease the financial burden of the indebted amid destruction wrought by flooding.

Speaking at the Council of Ministers on Friday, Hun Sen called for understanding from private and registered lenders, suggesting grace periods for repayment, cancelling late penalties and forgoing interest rates.

In addition to causing more than 100 deaths, the rising waters have damaged hundreds of thousands of crops, wrecked infrastructure and put farmers who took out loans to pay for basic commodities in debt.

Lender singled out after documentary

Some 1,000 employees from one of Cambodia’s largest microfinance institutions gathered in the Koh Pich exhibition hall yesterday to watch A River Changes Course, the award-winning documentary about three Cambodians from different backgrounds all struggling to eke out a living in fast-changing times.

Why Angkor Mikroheranhvatho (Kampuchea) Co Ltd, or AMK for short, bothered to hold a screening at all during its annual conference in Phnom Penh became a little clearer in a scene about 30 minutes into the story. The mother of one of the movie’s subjects, a woman from Svay Rieng province, tries to repay a loan to an AMK employee, who is dressed in the company’s signature purple shirt.

She doesn’t have enough. In the ensuing exchange between the woman, the employee and others observing the transaction, the woman appears to be mocked for not coming up with the remaining 22 cents to cover the payment. She’s told by one of the men to “just bring it”. Someone then describes her attitude as “sassy,” according to the subtitles.

MFI loans rise, but dip in deposits

The total amount of loans at Cambodia’s microfinance institutions (MFIs) continued to grow in the post-election period, climbing 9 per cent in the third quarter of this year when compared to the previous quarter that finished at the end of June. Deposits declined slightly.
Loans at Cambodia’s 35 microfinance institutions reached close to $1.2 billion at the end of September, a slight rise from the $1.08 billion at the close of the second quarter, data from the Cambodia Microfinance Association (CMA) released last weekend show.