Cambodian software firm Morakot Technology is looking to become a major financial technology (fintech) player in the Kingdom with the development of an operating system for banks and microfinance institutions (MFIs) that hopes to provide cost-effective solutions to the country’s medium and small-sized players.

The software, called Morakot VB, was developed to provide a cheaper and simpler operating and accounting platform for the Cambodian financial industry, especially for small-sized MFIs, rural credit operators and non-government organisations working with financing solutions, according to Khuon Soporth, CEO and co-founder of Morakot Technology.

The software’s greatest appeal is the option to run the platform as a cloud-based solution, eliminating the need for expensive server infrastructure, Soporth explained.

“The idea behind this software platform is to provide microfinance [institutions], leasing companies and credit operators with an alternative standard core-banking system that could revolutionise the way we implement and use core-banking systems,” he said.

The company was selected earlier this month to participate in Startupbootcamp’s three-month fintech accelerator program in Singapore, giving Morakot a platform to rapidly expand and access greater investment opportunities.

Morakot was initially founded in 2014 by Soporth and two other Cambodian co-founders, all with extensive MFI backgrounds. Soporth previously led the IT team for one of the country’s major credit lenders, during which he worked with international software programs that he said were difficult to use and very expensive.

“We were using the number one software in the world, which is a million-dollar software and we learnt a lot from that,” he said. “It took us more than two years to implement that software and it cost us a lot of money.”

In Cambodia’s extensive credit industry, Soporth estimates that only five percent of institutions can afford to implement and use established international software. This has led many smaller institutions to do their bookkeeping on Microsoft Office Excel or even maintain paper-based records, he added, thus giving the company a huge market opportunity.

“Our software is specifically designed for microfinance and it takes us only three weeks to implement the standard package compared to one or two years for other imported software,” he said. “It is going very quick now in terms of getting clients and we are implementing about two projects a month.”

Morakot now has 10 employees and is providing software solutions to 21 clients who manage more than $57 million in loan portfolios for around 22,000 clients, according to Soporth.

The company’s current strategy, he explained, was to gain greater trust in the market by first targeting smaller MFIs and credit operators and then expand to work with larger institutions and banks.

The next step for Morakot is to incorporate the company in Singapore and then begin expanding to Myanmar before the end of the year. Soporth expects to land deals with around two or three clients in the new market over the next months.

Eng Bunthach, chief information officer at LOLC (Cambodia), a microfinance deposit-taking institution, noted that local software solutions could offer a range of benefits, such as knowledge of the Cambodian market and a better ability to meet the needs of Cambodian firms without problems related to language or time zone.

However, he noted Morakot would need more time to develop in order to match the capacity of established software.

“It is not easy to comply with the National Bank’s flexibility needs or standardized global requirements such as IFRS (International Financial Reporting Standard) or FACTA (Fair and Accurate Credit Transactions Act),” he explained. “So they need to have more time to do the [aforementioned] things and improve step by step.”

Bunthach also noted that the new interest rate caps announced by The National Bank of Cambodia earlier this month could make cheap local software like Morakot VB an attractive option for smaller MFIs and credit operators who might face greater financial constraints.

Leng Visoth, vice president and management information system (MIS) director at Hattha Kaksekar Limited (HKL), one of the largest MFIs in the Kingdom, said implementing new banking software posed challenges for firms noting that costs certainly were a barrier for many firms.

However, established programs were also reliable and flexible in the long-run, though he added that Morakot offered tangible benefits that could allow it to grow in the country’s financial sector.

“With the growth of MFI and banking portfolios, as well as the increase in the number of licensed credit operators, I believe there is a demand for technology from these MFIs and banks to drive their business in a secure and effective way,” he said. “Morakot is a local software developed by experienced staff from the banking and MFI sector so it should be a powerful, secure and flexible software.”