The first comprehensive survey of the accessibility and usage of Cambodian financial services found that only 17 per cent of the Kingdom’s adult population is banked, with poor access to financial services among the key impediments to financial inclusion of those living in rural areas.

The FinScope Consumer Survey, whose topline findings were released yesterday, is a representative study of the usage of and access to financial services in Cambodia.

The comprehensive data sets were extrapolated from 3,150 interviews of adult Cambodians nationwide conducted over a three month period ending January 2016. The findings will be used to identify the drivers and barriers of financial inclusion, and to shape initiatives aimed at broadening financial inclusion.

“The demand-side survey was undertaken to understand the status of financial inclusion, and the needs and behaviour of both women and men relating to formal and informal financial access and use,” explained Neav Chantana, deputy governor of the National Bank of Cambodia (NBC), speaking at the Mekong Financial Inclusion Forum.

The survey findings show that the formal financial inclusion rate in Cambodia is 59 per cent, while more than a third of the population use informal or services such as unregistered lenders or savings clubs. At least 29 per cent are financially excluded, using neither formal nor informal financial services.

Within the formal financial sector, just 17 per cent of adults use banks, while 24 per cent rely on microfinance institutions (MFIs).

According to Obert Maposa, a research specialist at FinMark Trust and project leader for the FinScope survey in Cambodia, one of the key challenges to the 75 per cent of the population that lives in rural areas is access to financial infrastructure.

“Looking at the proximity to financial infrastructure . . . access to MFIs, post offices, bank branches and ATMs seems more of a rural challenge, with less than half the rural population able to access these in 30 minutes or less,” he said.

Cambodians living in rural areas where farming is a major source of personal income rely more on credit than their urban counterparts, the survey showed. While 58 per cent of respondents indicated they do not borrow, mostly out of fear of debt, 54 per cent of those who do turn to MFIs. Another 22 per cent borrow from family and friends, while just 14 per cent who borrow use a bank.

Over half of respondents said they had no savings at the time of the survey, with 86 per cent of these claiming they had no money left after covering basic living expenses. Of those saving, about half kept the money at home or relied on a secret hiding place, while 31 per cent invested in buying livestock and another 21 per cent bought gold or jewellery. In addition to savings, livestock and gold or jewellery also served as investments offering the possibility of future profit through a later sale.

The FinScope survey was developed by South Africa’s FinMark Trust in partnership with the United Nations Capital Development Fund (UNCDF), United Nations Development Program (UNDP) and Cape Town-based think tank Cenfri, as well as local partners NBC and the National Institute of Statistics (NIS).

To date, the research tool has been applied in 24 African and Asian countries, including Cambodia’s regional neighbours Thailand, Myanmar and Laos.

Henri Dommel, UNCDP’s director of inclusive finance, said the launch of the FinScope survey was a concrete step by the Cambodian government toward implementing its national strategy on financial integration. He said a supply-side survey was currently under development that would help complete the picture of Cambodia’s financial market.