[National Bank of Cambodia] (NBC) gives Mobitel time to comply [with Cellcard cash program]

Wednesday 17 November 2010
Telecomparer

The National Bank of Cambodia (NBC) has given mobile operator Mobitel until February to ensure its Cellcard Cash programme complies with regulations. The money transfer service was launched in September without oversight from the National Bank of Cambodia. However, the bank issued an edict in August that requires third-party processors to comply with certain rules. The bank has now given the company more time to ensure compliance, The Phnom Penh Post reports citing Bank director general Tal Nay Im. Mobitel established the Cellcard Cash service after receiving a grant from the GSM Association's Mobile Money for the Unbanked initiative in May. The programme is largely funded by the Bill and Melinda Gates Foundation.

Cambodian Network Warned Over Mobile Money Service

14th October 2010
The Phnom Penh Post

­The National Bank of Cambodia has warned that it will take action after local mobile network, Mobitel launched a mobile banking service without applying for permission from the Central Bank. The Central Bank issued a ruling in August that it must oversee credit remittances - which it says includes the money transfer services provided by mobile networks.

Mobitel's Cellcard Cash service was launched on September 20 without the filing of an application, reports the Phnom Penh Post. The money transfer service is backed by the Bill and Melinda Gates Foundation.

Central Bank director general Tal Nay Im declined to comment on what action the central bank was considering, she did not rule out legal action against the mobile network operator.

"I cannot tell you yet [what action we will take], but we have to do something," she said.

Mobitel Chief Executive Officer David Spriggs declined to comment on the issue, but operations manager Kay Lot has said that the company did not consider mobile-money transfers to be banking.

Mobile Service Targets Cambodia's 'Unbanked'

Customers can withdraw or deposit money from their WING accounts at local Cash X-Press outlets.
WING customers can access their accounts and send money through their phones.
A market seller uses WING for a payment.

SEPTEMBER 14, 2010
By ANDREW LAVALLEE
Wall Street Journal

How do you roll out a banking service in a place where most people don't have bank accounts?

Australia & New Zealand Banking Group Ltd. tackled that question in developing WING, a banking and payment system it launched in Cambodia early last year.

In Phnom Penh, said Peter Dalton, ANZ's general manager for innovation, it's not uncommon for workers to send money to relatives in rural areas via a taxi-bound courier, which is risky as well as expensive. The Melbourne, Australia, bank estimates that only about 500,000 of the country's 14 million population have bank accounts, but "there is a need for saving and sending money," he said.

In addition to "unbanked" consumers, there are the "underbanked"—those who have bank accounts but don't have ready access to them because branches and automated teller machines are rare in many parts of the country, Mr. Dalton said.

A large number of Cambodians do have cellphones, though. WING works on four of the country's major mobile networks—hello, qb, Mfone and Smart Mobile—via a simple interface. Customers enter their account numbers and personal identification numbers, then see a menu of options that includes checking their balances, paying bills and sending money.

To send money, they enter the recipient's WING account number, or if the funds are going to someone who doesn't have a WING account, the person's mobile-phone number. (Funds are tied to the WING account, not the phone, so a customer won't lose his money even if his phone is lost or stolen.)

Recipients are notified by a text message when the transfer is complete. ANZ charges about 50 cents to send the equivalent of $20, a notable savings when compared with the $1 to $2 that Cambodian couriers typically cost.

There are now some 150,000 WING accounts, and Mr. Dalton said he wouldn't be surprised to see the service reach 200,000 customers by early next year. ANZ hasn't set a target number, however, he said. "We love the growth rates that we have now."

In addition to the technological challenges of creating a mobile-payment service, ANZ had to figure out a cost-effective way to introduce it "to people who have never seen this before," he said. To do that, the company enlisted a fleet of 1,800 "pilots," part-time workers who sign up new customers and teach them how WING works. They receive a commission for each new sign-up and help spread the word about the program, often at markets and other high-traffic areas.

"There comes a time when you need cash," Mr. Dalton acknowledged, and that's where WING's Cash X-Press comes in. About 500 outlets are located throughout Cambodia's 24 provinces, and there WING customers can deposit and receive money through the service.

The Cash X-Press outlets, like the WING pilots, are another way of marketing the service, but they also help keep its costs down because they serve many of the same functions as ATMs, which are more expensive to build and maintain.

ANZ, which is working with its ANZ Royal subsidiary in Cambodia, plans to extend WING to support more types of billing, such as electricity and water, for its customers, and it hopes to offer the ability to transfer funds in other currencies, such as dollars.

It is also interested in getting local employers signed up to use the service. Cambodia's garment industry, for example, still largely pays workers in cash, which results in long lines on paydays, Mr. Dalton said. Using WING would allow an employer to pay its work force much faster and with fewer opportunities for error.

In addition to tapping a growing mobile-payment market, Mr. Dalton said WING promotes business development and a stronger understanding of how money works among its user base, particularly when it comes to saving. It also gives customers in poor areas an alternative to informal couriers and loans, which often carry high fees and theft risks.

"We think this is a service that encourages both economic and social development," he said. "You can actually generate more healthy economies."

RESPONSE to THARY UNG’s misleading and defamatory comments of RICHER & SITHEA SAN and GOLDEN COAST BANK

Dear Friend,

Thary Ung’s email is misleading the public (with the help of Borann Duong who is a publisher of a Cambodian Newspaper) with the clear intention to defame and personally hurt us as well as the Golden Coast Bank, the first Cambodian charted bank in the United States of America, which we helped to establish in May, 2007 in Long Beach, California. We, Killing Fields Survivors, came to this country as refugees with few dollars and were able to help establish a commercial bank like other ethnic communities (Chinese, Korean, Vietnamese and Japanese) in the United States.

It appears that Thary Ung has no understanding of the operations and regulatory requirements of a commercial bank in the United States. She doesn’t understand the difference between an administrative “Cease and Desist Order” and a “Court Order.” However, before explaining about the bank’s operations and regulatory requirements, we want to share with you what appears to be Thary Ung’s animosity towards Golden Coast Bank, a community bank and the first Cambodian chartered Bank in U.S., which every Cambodian should be proud.

Please see the attached letter for additional information. Should you have any further question,

Do not hesitate to contact me at (562)367-7770.

Thank you

Richer San
562-367-7770 Cambodia Town, USA

When the Going Gets Tough, Most Borrow Local

By Ros Sothea, VOA Khmer
Original report from Phnom Penh
13 October 2009

Although financial institutions have flourished in recent years, informal credit systems at the village level remain popular for many Cambodians, a practice that could eventually hurt the economy and add risk to both lenders and borrowers, economists say.

Phlong Pisith, who recently completed research for Northern Illinois University, in the US, found that when money is badly needed, many still turn to rich neighbors or local leaders, a system that relies on relationships and confidence between borrows and lenders and is devoid of contracts.

Focusing on Kandal province’s Koh Thom district, where informal credit remains very popular, Phlong Pisith found that informal lending did not even require collateral.

“The traditional credit system is still active in Cambodia nowadays,” he told VOA Khmer recently. “Because when people need money urgently, they can’t go straight to the bank or micro-finance institutions. So they first go to borrow, at interest, from those they know.”

These informal systems have historic roots and are used by fishermen, farmers and business owners alike, as a way to create more jobs or improve livelihoods.

“It is very hard to borrow money from banks,” said Chum Kimsuv, a farmer in Battambang province. “There are many documents needed, such as signatures from the commune, as well as photographs. It’s too complicated. If we borrow from [local] capitalists, we already know each other well.”

Doung Chamreoun, a fisherman from Kandal, said he was a bank customer, true, but he also couldn’t abandon informal systems, which remain important to his daily living.

That may be, but economists warn these systems will eventually hurt the economy, as some lenders quickly get into trouble with high interest rates. In informal systems, these can reach from 5 percent to 10 percent a month, while credit in the formal sector is around 2.5 percent or 3 percent.

Creditors, meanwhile, risk losing money because they have no guarantees, said Lim Sovannara, an economist for UNDP. People continue to use the systems because they have limited education and limited trust of financial institutions, he added.

Phlong Pisith also found, though, that informal lending can support formal lending, helping borrowers make payments on time instead of risking their collateral.

Still, said Chan Sophal, president of the Economists Association of Cambodia, only formal credit systems will better the economy over time.

Numbers of borrowers, lenders or loan amounts in this informal section are unknown to the National Bank, its general-director, Tal Nay Im, said. But she claimed the number is falling, as more people turn to financial institutions.

Cambodia has more than 50 banks and micro-finance lenders, though only the latter provide money to the rural poor. Up to 2008, the National Bank estimates that some 850,000 people have taken advantage of such loans, a number that has jumped from a reported 44,000 borrowers in 1994.

Still, a large amount of informal lending takes place, said Ros Seilava, deputy secretary-general of the Ministry of Economy and Finance. The government is now strengthening its policies to encourage more interest rate reduction among micro-finance lenders, while encouraging people to use formal services.

ACLEDA opens first Laos branch

Tuesday, 08 July 2008
Chun Sophal
The Mekong Times

ACLEDA Bank – the largest Cambodian bank – is today opening its first branch in neighboring Laos, the first step in its bid to start business operations internationally, said ACLEDA’s Executive Director In Channy.

“We hope to benefit from the potential advantages by opening the branch because Laos has a good growth market, similar to that in Cambodia,” he said. “Laos’ economic potential for ACLEDA Bank is first-rate – not the usual. We plan to open three branches in Laos in 2008.”

The three new branches are set to cost US$10 million and employ 12 Cambodians and 80 Laotians.

Economic analysts predict ACLEDA’s expansion into Laos will help the bank lead Cambodian investment abroad.

Chan Sophal, president of the Cambodian Economic Association, called the move “a source of pride for Cambodia,” saying it indicated a healthy Cambodian banking sector. “We think that it … will build more confidence in the sector which is essential for economic development,” he said.

ACLEDA, currently holding capital of over US$50 million, is looking to open branches across the Asean bloc and in other countries in the Greater Mekong Sub-region, In Channy said.

“Now, our long-term plan is to transform ACLEDA Bank into a regional bank, not just remain as a local bank. We will continue to expand with branches in China and Vietnam,” he said.

Chan Sophal warned that Cambodian banks should not be attempting to open branches in other countries in the region other than Lao and Burma, as the other countries have stronger growth potential than in Cambodia. “ACLEDA may go to China and Vietnam, but the transaction situation may not be easy as in Laos,” he said.

S. Korean bank to operate in Cambodia next month

June 28, 2007

The first commercial bank funded by South Korean investors will begin operations in Phnom Penh next month, with unusual banking services on offer, local newspaper the Rasmei Kampuchea said on Thursday.

Camko Bank, which is in the family of Camko City, a 2 billion U. S. dollar South Korean housing project to construct a satellite city on the outskirts of Phnom Penh, will become operational late July, the report quoted a Camko City official as saying.

With capital from its parent bank in South Korea, Busan Bank, Camko Bank will provide a variety of "unprecedented" banking services such as loans, VIP services and savings, according to the official.

Different from commercial banks currently operating in Cambodia, Camko Bank will provide among other things a lending service that borrowers don't have to repay the principal, but only the interest, said the official, who declined to elaborate on the issue.

According to the official, Camko Bank will play a main role in the future stock market in Cambodia.

The Korean International Cooperation Agency (KOICA) has been assisting the Cambodian government to set up a stock exchange market in Cambodia, which is expected to start in 2009.

Source: Xinhua

[South Korea] Shinhan Bank eyes wholly-owned bank in Cambodia

Shinhan Bank eyes wholly-owned bank in Cambodia

SEOUL, April 13 (Yonhap) -- Shinhan Bank said Friday it plans to establish a wholly-owned commercial lender in Cambodia in an effort to tap the country's growing project financing market.

The flagship unit of Shinhan Financial Group said the envisioned bank will be set up in Phnom Penh, the capital, as early as September.

"Cambodia has high demand for project financing since there has been a social infrastructure construction boom in the Southeast Asian country," a bank official said.

Shinhan Bank also said it has applied for regulatory approval to set up its third branch in India. Currently, it has branches in Mumbai and New Delhi.

In addition, the bank said it is pushing to upgrade its Chinese branch to a wholly-owned lender.

Shinhan Bank's overseas push comes as its chief executive officer has recently stressed the importance of expanding overseas operations.

"Local banks need to look to overseas markets instead of competing with one another in the crowded domestic market," Shin Sang-hoon said at a ceremony marking the first anniversary of the bank's merger.

Shinhan Bank merged with Chohung Bank in April last year to become South Korea's third-largest lender.

Meanwhile, top lender Kookmin Bank said it plans to open branches in Ho Chi Minh City, Vietnam and Almaty, Kazakhstan as part of efforts to boost its overseas business.

No. 5 lender Korea Exchange Bank, controlled by U.S. Lone Star Funds, is also pushing to advance into Dubai, according to sources.

"Domestic banks' overseas expansion is aimed at finding new revenue sources in the highly competitive local market amid tighter rules on housing loans," a local bank official said.

sooyeon@yna.co.kr