The formal financial inclusion landscape in Cambodia is heavily skewed towards credit services and remittance services. MFIs are the largest provider of formal credit products, with 23% of adults accessing micro-credit. Mobile money is the most popular remittance channel, with 89% of remittance senders making use of this service. Only 10% of Cambodian adults have formal savings, and only 4% have formal insurance. The situation creates a large shortage in appropriate formal risk mitigation tools available for adults, who often have to resort to using sub-optimal credit or make use of informal financial services.
The Royal Government of Cambodia has made it a strategic priority to implement a financial inclusion policy for the country. The government has adopted the Financial Sector Development Strategy (2016–2025), whereby during the implementation of the strategy, efforts to adopt a national strategy for financial inclusion will also be underway. MAP Cambodia is designed to input into the strategy formulation for financial inclusion. The project 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. Beed Management was the main research partner on MAP Cambodia, with Cenfri providing quality oversight.
There are four main outputs from MAP Cambodia: a diagnostic report, a summary report, a stakeholder presentation and a road-map report. The country diagnostic report contains a comprehensive demand-side, supply-side and regulatory analysis. The demand-side analysis draws from quantitative data provided by Cambodia FinScope Consumer Survey 2015.The supply-side and regulatory analysis pulls data from interviews, mystery shopping and a range of industry documents.
The diagnostic report concludes on cross-cutting factors that drive financial inclusion in Cambodia and outlines key priorities for extending financial inclusion. Initial findings from the research suggests the following recommendations:
- Promote savings in formal financial institutions
- Improve the functioning of the credit market
- Increase usability of digital payments systems
- Prioritise the development of a well-functioning insurance market
- Build institutional capacity and facilitate regulatory reforms
- Improve financial literacy, awareness and consumer empowerment
Once the findings of the diagnostic report have been accepted, the MAP Cambodia financial inclusion roadmap will set out an agreed programme of action for addressing the identified recommendations. The implementation of the proposed recommendations is anticipated to deepen and broaden financial services usage. In doing so, it will directly improve household welfare, foster sustainable business models and support broader economic development.