Officials and business people say solar panels are gaining in popularity in rural areas, where the power grid does not reach.
Mao Sangat, director of Solar Energy Cambodia, told the Post yesterday that his company saw increases of installation of solar power systems for families whose children worked abroad and remitted... continue
Cambodian migrant workers sent home $256 million last year, according to a report from a U.N. agency and the World Bank, which was released in Bangkok yesterday.
The report from the bank and Rome-based International Fund for Agriculture Development (IFAD), titled Sending Money Home to Asia, found that migrants from Asia sent a total of $260 billion in international remittances in 2012. …
“[B]ut high [bank] fees and limited financial services outside of urban areas are reducing the benefits of those remittances for millions of rural residents,” says a joint statement accompanying the report.
The report does not specifically outline how serious these problems are in Cambodia, which received $256 million, or 1.8 percent of gross domestic product (GDP), in remittances last year. Workers sending money home are charged on average 5.59 percent on remittances to Cambodia, the report says. ….
But the report notes Cambodia’s high saturation of microfinance institutions (MFIs) in the provinces means that rural access to remittances is likely better than elsewhere.
MFI’s account for 26 percent of transfers to Cambodia, but the costs for these transfers average 10 percent of the amount being sent, the report says. …
Moeun Tola, head of the labor program at the Community Legal Education Center, said many migrant workers, especially those working in Thailand send money back through informal channels, which would not be included in the report. …
Vietnam’s investment in Cambodia has increased significantly in the last three years, but a mechanism to encourage and oversee investments in prioritized sectors is needed, according to diplomatic sources.
Tan Nguyen Tien, head of the economic section at the Vietnamese embassy in Phnom Penh, said Vietnam’s investments in Cambodia quadrupled from $566 million in 41 projects in 2010 to $2.5 billion last year. …
Tien said Vietnam Airlines’ direct services between the two countries and Viettel’s telecom service in Cambodia have helped boost Vietnamese investment in that country. …
There are also four projects in the energy sector with a total investment of nearly $800 million, five in finance-banking with $250 million, one telecom project capitalized at $150 million, and a civil aviation project worth $100 million.
Vietnamese FDI in Cambodia is expected to top $4 billion by 2015, and trade between the countries to increase from $3 billion last year to $5 billion by 2015. …
Accessing low-interest loans for rice cultivation is a challenge because the industry in Cambodia is dependant upon rainfall and not irrigation and is thus more risky, experts said last week.
In a meeting on the private sector development in the rice sector, Lim Heng, vice president of the Cambodia Chamber of Commerce, suggested that the government should supply more irrigation systems for better rice output.
“If we do not have enough water systems and still depend on the rainfall, the risk can be very high,” Lim Heng told participants in the meeting. “Therefore financial institutions will be hesitant to give us loans as they think it is too risky. …
Research over the past two years conducted by Srey Chanthy, an independent agricultural analyst, shows that at least $1 billion per year is needed by farmers to strengthen production. …
AEON Microfinance (Cambodia) Co, part of Japan-based AEON Group, said sales by instalment for electrical appliances and motorbikes increased by 715 per cent in the first quarter of 2013 year on year, a trend industry experts say will grow further with increasing demand for electronics.
Started in December 2011, loan disbursement reached $2.5 million with 5,000 new customers in the first quarter of this year, compared to $343,000 in the same period of 2012, managing director Daisuke Maeda told the Post yesterday.
“Smartphones and PCs are the most popular, followed by motorbikes,” he said. …
The total loan portfolio of AEON Microfinance (Cambodia) at the end of the first quarter this year was about $4 million, with 6,500 customers, Daisuke Maeda said. …
Prime Minister Hun Sen yesterday lashed out at the opposition party’s concerns over the interest rates charged by commercial banks to farmers.
SRP lawmaker Yim Sovann said commercial banks in Cambodia charge customers very high interest rates, and said it is much higher than in other countries. …
However, the premier, speaking at the opening of a new rubber processing plant in Stung Treng province said Sovann’s words do not apply with the market practice and the real situation in Cambodia’s economy. …
“Based on the market economy, they don’t allow the state to handle commercial bank. We have a national bank which cannot provide that serivce to customers. If people have money to deposit at the bank, they will get five per cent, some give four per cent and other 5.6 per cent [interest rate],” said Hun Sen. …
“To lower the interest rate to one per cent, it would kill the bank … They are against the political protectionism,” he said. …
According to the statistics from the National Bank of Cambodia, the Kingdom’s 32 commercial banks have lent $5.49 billion to about 1.6 million borrowers by November 2012, up 30 per cent year-on-year. …
The new 100,000 riel banknote depicting the late King Father Norodom Sihanouk is not just a pretty historical token. It will also help inject much needed cash into the economy, according to the National Bank of Cambodia.
Although take-up will occur as older banknotes of other denominations deteriorate, the introduction of the new denomination will provide additional liquidity that is demanded by Cambodia’s rapid growth, NBC director-general Nguon Sokha said. …
Kang Chandararot, president of the Cambodian Institute for Development Study, is concerned that now is not the right time for increasing the liquidity volume in Cambodia. A strengthening dollar, “seasonal riel demand”, a lack of long-term growth and inflationary pressures from the Kingdom’s neighbours are all reasons increasing liquidity was “dangerous”, he said. …
Japanese Bank of Tokyo-Mitsubishi UFJ (BTMU) signed an agreement yesterday with local Canadia Bank to shore up Japanese growth in Cambodia and to demonstrate its confidence in the Kingdom’s financial sector.
BTMU’s managing executive officer, Takami Onodera, and Pung Kheav Se, chairman of Canadia Bank, yesterday signed the agreement with the intention of bringing more Japanese investors to Cambodia. …
Japanese investment totalled about $330 million last year, a big jump from about $75 million in 2011.
Furthermore, data from the Japanese Business Association of Cambodia show that there were 101 Japanese companies here at the end of 2012, an increase from 69 the year before. …
The National Assembly yesterday passed a law to amend three articles in the anti-money laundering and terrorism financing law by a vote of 83 to six.
Speaking at the start of session, Chea Chanto, governor of the National Bank of Cambodia, said the amendments would give the law more teeth by raising sentences and fines.
Last year, Cambodia was ranked the third most-susceptible country (out of 144) to money-laundering by the Switzerland-based Basel Institute on Governance. Chief among its reasons was insufficient regulation and rampant corruption. …
“I would like to raise … that in Cambodia there is presently about $1 billion in dirty money coming from corruption and illegal actions of powerful men and some dishonest companies,” he [Cambodia National Rescue Party lawmaker Yim Sovann] said. “We have the laws, but the measures taken to fight corruption are still weak, and this law might not really be effective.” …
Cambodia will launch a new 100,000-riel banknote (in equivalent to 25 U.S. dollars) in order to celebrate the sixtieth birthday of King Norodom Sihamoni on May 14, a central bank official said Wednesday. …
A sub-decree on the issuance of the new 100,000-riel banknote was signed by Prime Minister Hun Sen on April 30. The 100,000-riel bill is the country’s highest riel value banknote. …
An insurance training centre is being planned in Cambodia to develop local expertise lacking in the Kingdom’s nascent insurance industry.
The institute hopes to offer diploma courses to industry leaders here so they in turn will be qualified to provide insurance training to others, such as their own staff, said Chhay Rattanak, chairman of the Insurance Association of Cambodia (IAC), the representative body for the Kingdom’s nine insurance companies.
The classes would be accredited by the Malaysian Insurance Institute (MII), a non-profit organisation that provides insurance training. Companies that face problems hiring qualified locals would benefit, because currently “not many people know about insurance, and some students want to study it, but do not know where to go to”. …
A new microfinance institution (MFI), ORO Financecorp Plc, is set to open in Cambodia, according to the director-general of the National Bank of Cambodia (NBC). …
Cambodia already has 35 registered MFIs, according to a recent report by the Cambodia Microfinance Association (CMA). …
Last week, the Post reported that the loan portfolios of the 35 registered MFIs and four NGOs that are members of the CMA reached $1 billion at the end of March, a 41 per cent increase from the same time last year. …
F1soft Company, a software service provider that makes banking transactions available via phone, had commenced operations in Cambodia, company officials said yesterday during a workshop. …
Sean Thorninn, a lecturer in economics at the Limkokwing University and expert in Cambodia’s landscape of microfinance institutions (MFI), told the Post a growing number of financial institutions in the Kingdom were begining to provide mobile financial services. To maintain their existing clients and to aggressively compete in the market, banks and MFIs strategically have been “emerging to a new era of branchless banking”, he added. …
Cambodia is considering offering sovereign bonds to raise more revenue for the national budget and move away from its dependence on overseas aid, a senior central bank official said Sunday.
National Bank of Cambodia director-general Nguon Sokha said the Ministry of Economy and Finance was currently looking at other countries’ experiences with bond markets and was seeking outside help to issue the government’s first bonds.
By issuing sovereign bonds governments can raise money from international investors that are usually paid back with interest at the end of a fixed term. …
Ms. Sokha said there was no set date for when the bonds might be issued, but officials were working on the plan with help from the Asian Development Bank (ADB) and members of the Asean+3 group, which includes China, Japan and South Korea. …
Cambodia is set to graduate this year or next to a lower middle-income country but still qualifies for overseas development assistance and concessional loans from international institutions.
“For long term financing, we cannot really survive on development assistance,” Ms. Sokha said. …
Although Cambodia does not currently issue sovereign bonds, it has been assessed recently by credit rating agencies. The most recent assessment by Moody’s gave the country a stable but high-risk “B2” rating, which means Cambodia is deemed to have “very low economic resiliency.”
Cambodia’s 35 microfinance institutions had lent 1 billion U.S. dollars to customers by the end of March this year, up 24 percent from 808 million U.S. dollars it lent at the end of last year, the data of Cambodia Microfinance Association (CMA) showed Wednesday.
On the deposit side, the customers’ deposits at microfinance institutions had amounted to 346 million U.S. dollars at the end of March this year, up 54 percent from 225 million U.S. dollars at the end of last year, the data said. …
The Ministry of Economy and Finance (MEF) last month signed a prakas, a ministerial decision, to ensure tax agents’ professionalism, an insider told the Post yesterday. …
After the full implementation of Prakas 455, signed on April 12, agents have to pay one million riel to obtain a licence every two years. They need to be at least 18 years old, have a relevant qualification or record of study of at least six months and a clean criminal record.
Professionals also need to pass an examination, unless they already have a professional document from the MEF or the Kampuchea Institute of Certified Public Accountants and Auditors (KICPAA), or are former tax officials. …
More economic activity and a better understanding of using formal financial services among rural residents are leading to good loan performance rates and increases in savings deposits in Cambodia’s microfinance industry, according to industry sources.
The loan portfolios of the 35 registered microfinance institutions (MFI) and four NGOs that are members of the Cambodia Microfinance Association (CMA) reached $1 billion at the end of March, a 41 per cent increase from a year earlier, according to recent figures from the CMA.
Deposits made at seven microfinance institutions that are licensed to take deposits (MDIs) reached $346 million, a 145 per cent increase over the past 12 months. …
An online trading firm based in the tax haven of Cyprus is planning to open a subsidiary in Cambodia, an account manager at IronFX’s headquarters in Cyprus said yesterday.
“We are on the planning stage in Cambodia. We are now studying law and regulations in the country right now,” account manager Siwapong Meesuntree said by Skype. …
When asked about reports from sources at recruiting firms in Phnom Penh that local staff had already been hired to receive training at IronFX’s headquarters in Cyprus, Siwapong replied: “We will have Cambodia staff very soon.”
Cyprus’s financial services industry has been in the spotlight this year following that country’s financial crisis. The island nation’s financial services industry had grown massively through a combination of tax and regulatory incentives, including a high level of secrecy that can, in some cases, “make the disclosure of information in Cyprus offshore bank accounts … punishable by the law”, according to tax haven experts. “Bank employees and other persons who are associated with Cyprus banks must take an oath of secrecy,” the website Taxhavens.biz says. …
The World Bank has warned that the rapid growth of lending by Cambodia’s Banks is still a concern, despite a recent slow-down in credit disbursals.
“Credit growth, which has been driven largely by wholesale and retail financing, and starting in 2011 agriculture financing, has eased to 29.2 percent (year on year) in January 2013,” the bank said in an economic update sent out on Friday.
The annualized rate of lending growth was 34 percent in December and as high as 34.6 percent in January 2012, the bank said.
The high rate of growth had raised concerns of overheating from international financial institutions, and led the National Bank of Cambodia to raise the reserve requirement imposed on Banks from 12 to 12.5 percent in September. …
[The World Bank] also noted that Cambodia’s trade deficit in 2012 was 11.5 percent, up from 8.7 percent in 2001, due to rising fuel imports and construction materials being brought in for large hydropower projects.
However, this was cancelled out by a jump in foreign direct investment, which reached $1.5 billion last year.
Cambodia’s banking industry recorded a slight increase in lending in the first two months of this year after a sharp rise last year, according to a consolidated data provided by the National Bank of Cambodia (NBC) on Saturday.
The data showed that the kingdom’s 33 commercial banks had lent a total of 5.99 billion U.S. dollars to customers by the end of February this year, up 1.7 percent from 5.89 billion U.S. dollars at the end of December last year, the report said.
It added that 32 percent of the loans went to wholesale and retail trade, 10 percent to agriculture, 9 percent to manufacturing, 8 percent to construction, 6 percent to hotels and restaurants, 6 percent to mortgages and the remaining percentage went to financial institutions, real estate and personal borrowing. …
By the end of February this year, the NBC said that the banks received 6.25 billion U.S. dollars, up 1 percent from 6.19 billion U.S. dollars at the end of last year.
Cambodia has the population of about 14.5 million. Its banking sector has been serving about 1.6 million borrowers and 1.9 million depositors, according to the NBC.
