The Kingdom’s banking and financial system has maintained sound growth momentum despite Covid-19-related setbacks over the past couple of years, according to a senior official at the central bank on October 31.

Rath Sovannarak, director-general of the National Bank of Cambodia’s (NBC) Banking Supervision Department, was speaking at an outdoor event on the occasion of ASEAN Savings Day themed “Small savings are better than none” in Siem Reap town.

He emphasised that depository institutions and similar entities are important engines of socio-economic development, and underlined their role in driving financial inclusion, primarily through a diverse range of products and services that aim to meet current needs and align with trends.

Offering evidence of their results, Sovannorak revealed that, as of August 31, deposits at Cambodia’s financial institutions hit 170.6 trillion riel or $41.5 billion – using a conversion rate just over 4,100 KHR/USD – equivalent to 160.6 per cent of gross domestic product (GDP), or more than 106 trillion riel.

Deposit accounts also “increased significantly” to about 14.3 million – 11.7 million in commercial banks and 2.6 million in microfinance deposit-taking institutions (MDI), he said, adding that the Kingdom’s financial institutions now have a total of 2,593 branches and 4,219 ATMs nationwide.

At the same time, the NBC maintains the resilience, strength and progress of the banking system through risk-based monitoring and planning, the introduction of timely macro-precautionary measures, and undergirding for a modern payment system infrastructure, Sovannorak stated.

This, he explained, has significantly mitigated potential impacts and systemic risks, while strengthening crisis resilience.

“In support of the Royal Government’s policy during the Covid-19 outbreak, the [NBC] put in place a number of necessary measures to alleviate the burden on affected customers, such as allowing banks and financial institutions to provide loan restructuring and commute fines for clients affected by Covid-19.

“The [NBC] has partnered with the Association of Banks in Cambodia [ABC] and the Cambodia Microfinance Association [CMA] to enable banking and financial institutions to convey understanding and provide favourable conditions to flood-affected customers, through credit restructuring, delaying repayments, easing interest rates, waiving fines and pausing foreclosure proceedings,” Sovannorak said.

Speaking at the event, In Channy, former chairman and current board member at the ABC, echoed Sovannorak’s remarks that Cambodia’s banking and financial system has stayed strong and played an active role in supporting economic activity in light of protracted Covid shocks.

Although new daily coronavirus infections have remained in the single digits, the banking sector “continues to grow, maintain resilience and contribute to the recovery of the economy”, he said.

On the other hand, CMA chairman Sok Voeun remarked that Covid has presented the Kingdom’s microfinance institutions (MFI) with a new opportunity to evolve and pursue digital development to ensure sustainable growth and inclusion.

“The outbreak has also become a new opportunity for Cambodia, especially the banking and financial sector, to adapt to these constantly-evolving technologies.

“We clearly see that banking and financial institutions’ digital products are truly in vogue now among clients as well as the public, as they provide convenience, abundance and speed, and in particular, let customers do things on their own anytime and anywhere,” he said.