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.

Channy is not alone in his assessment of potential growth. Grant Knuckey, chief executive officer of ANZ Royal Bank, said that to describe the credit card market as “nascent” understates Cambodia’s “tiny” number of holders.

“The potential for credit cards is very high in this market given the low current base, the growing wealth of individuals, and the increasing consumerism evident,” he said.

ANZ Royal, according to Knuckey, has the greatest market share of credit card users in the country, with about 25 per cent of the total. Given the risks involved in a developing economy, however, the criteria for ANZ card holders are set high.

“Our own credit card business is very much targeted at our focus retail client segments, we do not target anyone who would not have a broader ANZ Royal relationship across other products,” he said.

Considering the 20 Visa-licensed banks in Cambodia including ACLEDA, Lorijon Bacchi, Visa country manager in Vietnam, Cambodia and Laos, said that the greater prevalence of credit cards can improve transaction efficiency, and “when used responsibly”, can provide a secure payment tool.

“As Cambodia’s economy grows, Visa is committed to working with our local banking partners to help Cambodian cardholders to understand how credit cards work so they can make informed decisions on how best to manage their money.”

National Bank of Cambodia director general Chea Serey said that with greater confidence in the banking sector, buyers and sellers are allowing more room for household consumer credit.

“But excessive spending is also a risk to be watched carefully,” said Serey, who added that “bad credit underwriting affects the bank balance sheet and profitability and can ultimately have repercussions on depositors’ money, the financial system and ultimately the whole economy”.