A delegation from China visited Phnom Penh this week to share tips on how Cambodia can increase its financial inclusion and meet the needs of its under-banked population using financial technology, or fintech.

Chinese government officials, fintech experts and impact investors joined a networking session on Wednesday evening aimed at promoting development and regional partnership for financial inclusion between China and Cambodia.

Addressing the delegates, Chea Serey, director general of National Bank of Cambodia (NBC), stressed the role and importance of digital finance initiatives in broadening financial inclusion. She said digital finance could be a “game changer” for Cambodia’s nascent financial sector as it enables financial service providers such as microfinance institutions (MFIs) “to reach more remote areas at a lower cost in a safer way and at a larger scale”.

Serey said the central bank was looking to support MFIs and digital finance, which together were increasing financial inclusion and lowering poverty rates.

“Realising that digital finance is a key to reaching the unbanked and under-banked [population], the NBC has created an enabling environment for institutions to deliver basic financial services through the licensing of payment services providers,” she said.

The Asian Development Bank optimistically projected earlier this year that fintech has the potential to generate over $1.7 billion in additional electronic payment flows in Cambodia, fuel more than $2.5 billion in additional credit uptake and mobilise more than $500 million in savings.

Serey said that while the NBC was dedicated to developing a national financial inclusion strategy, the private sector had to take the lead in banking the millions of adult Cambodians who still lack access to formal financial services.

“[The] NBC has played the role as a regulator, and the banks, financial institutions, investors and regulatory bodies must play a more active role in filling the gap of financial inclusion,” she said.

Duoguang Bei, president of the Chinese Academy of Financial Inclusion, one of the event’s organisers, said China has long-recognised the value of fintech in increasing financial inclusion and was taking proactive steps to increase its usage. He said 80 percent of China’s 1.4 billion citizens have already tapped into traditional or digital financial services. The government has targeted 100 percent by 2020.

Bei said financial inclusion was a top priority for China’s government, which recognises its particular importance for the micro-, small- and medium-enterprise (MSME) sector.

“More banks in China, particularly big banks, are starting to do business with MSMEs,” he said. “Those banks have started to establish special departments for financial inclusion.”

However, Shi Dalong, vice chairman of Bank of Taizhou, said that despite superficial similarities, China and Cambodia must follow different paths for fintech adoption.

“Different countries are faced with different situations,” he said.

“Cambodia’s economic situation is different, and it is also different if we compare it to China 30 years back.”

Pen Chanda, chairman and CEO of Bongloy, a Cambodian online payment gateway, said he is optimistic that the current technological infrastructure would help foster financial inclusion in Cambodia, as it can reach out to customers in rural areas with low costs.

“With a high mobile adoption rate and strong internet coverage, technology will play a key role in building financial inclusion in Cambodia,” he said. “Digital can reduce the costs needed to serve customers in provincial areas where there are high operational efficiencies, and hopefully translate into lower interest rates.”

“Going forward, we will see more financial institutions embracing the solutions provided by fintech companies to develop new products and provide a better experience for their customers,” he added.