A staff at a private bank counts money in Phnom Penh in 2022.
A senior official from the National Bank of Cambodia (NBC) has urged all citizens and financial institutions to collaborate in enhancing and fostering a culture of saving.
The initiative is aimed not only at easing the financial burdens on families when necessary but also at providing the additional benefit of interest income from deposits held with financial entities. The collective effort is also seen as a catalyst for more robust economic growth.
NBC deputy governor Yim Leat addressed an October 31 workshop in Kampong Thom province aimed at promoting “ASEAN Savings Day”.
The event, themed “Saving habits for you and your family”, sought to disseminate the virtues of depositing money within the community.
He pointed out that there is a common misconception that one should wait to save until they have a larger income.
He highlighted that irrespective of the amount one earns, without back-up money, expenses tend to scale accordingly, leaving nothing left.
“You don’t need a lot of money to start saving; it’s about clearly defining how much is necessary for expenses. You should always put aside some money, for ourselves and our loved ones. It is a crucial financial strategy to meet urgent future needs and ensure financial stability,” he said.
“The avenues for saving money today are numerous. Gone are the days of merely stashing cash in piggy banks; now, we can entrust it to official banking and financial institutions, where our funds are not only safe but also earn interest. This is far more secure than the traditional piglet. Working with formal institutions also means contributing to the nation’s economic development, as public deposits become a vital source of capital for investors within the country,” he explained.
Rath Sophoan, vice-president of the Association of Banks in Cambodia (ABC), highlighted that saving money offers multiple benefits including competitive interest rates, security and protection from diverse risks.
He noted that these funds can also serve as collateral to secure loans.
He added that depositing with banking institutions aids socio-economic development, as these funds are then available to support individuals looking to start or grow their businesses.
“The banking sector is experiencing significant growth and technological advancement, prompting Cambodians to increasingly opt for depositing with banking institutions. This shift has contributed to a remarkable increase in savings, with more than $39 billion accumulated in the first half of 2023 alone. This represents a six per cent rise and the creation of 13.7 million accounts, which collectively demonstrate the public’s trust in [our] banking system,” he added.
Dith Nita, vice-chair of the Cambodia Microfinance Association (CMA), said at the forum that for individuals, putting away money represents an investment that forms a safety net against unexpected crises like medical emergencies and income loss.
She emphasised that beyond providing security, it also enables individuals to take charge of their financial future, offering them peace of mind.
She added that for families, it acts as a foundational capital for education, which plays a critical role in lifting family members out of poverty. It serves as funding for healthcare and acts as seed money for small businesses that can enhance family livelihoods.
On a broader scale, at the community and national levels, she said the money has the potential to propel development by channeling funds into investments, job creation and stimulating economic growth.
She noted that countries with strong saving habits are more resilient to crises and fluctuations in economic conditions.
“To support the enhancement of deposits in the ASEAN region, Cambodia has formulated and executed the National Strategy on Financial Inclusiveness 2019-25. The strategy’s primary focus is to stimulate and increase holdings at formal financial entities like banks and deposit-taking microfinance institutions licensed by the central bank,” she said.
“These initiatives are yielding results, evidenced by a steep rise in the number of depositors, which soared from 100,000 in 2006 to 2.8 million by mid-2023. Deposit balances also experienced a dramatic increase, climbing from $2.5 million to nearly $5 billion over the same period. These figures are drawn from five deposit-taking microfinance institutions, among them Prasac Microfinance Institution Plc, which has recently transitioned into a commercial bank,” she added.
