Thailand
Association of Banks in Cambodia and actions to cut financial exclusion of women by half
In Channy, Chairman of The Association of Banks spoke to Khmer Times to Mark the Dissemination Workshop on Implementation of Financial Inclusion Strategy 2019-2025 And Official Launch of Let’s Talk Money: Little by Little Campaign.
- Main aims of financial inclusion
The initiatives towards financial inclusion by the Association of Banks in Cambodia (ABC) and its members are aligned with the National Financial Inclusion Strategy 2019-2025, which was adopted on July 12, 2019 by the Council of Ministers in the Plenary Session, with the objective to increase access to quality formal financial services in an affordable, legally protected, and timely manner; to increase usage of formal financial services from 59% to 70%, reduce the financial exclusion of women by half from 27% to 13% by 2025, as well as to encourage consumers to shift from informal to formal financial services with proper supervision. In addition, ABC also contributes to capacity building of lending-related staff for the whole sector, and to the enhancement of the adoption of digital banking.
Recently, the ABC and Cambodia Microfinance Association (CMA) have applied the interim-implementation of the Lending Guidelines as well as the Banking and Financial Institutions (BFIs) Code of Conduct for the whole sector.
For the BFIs Code of Conduct, we aim at:
Promoting effective, reliable, accountable and responsible banking and financial practices by setting business operations standards for Financial Institutions to follow and execute,
Increase transparency so consumers have a better understanding of what they can reasonably expect from the services provided,
Building a fair and professional relationship between consumers and financial institutions based on the principles of equity and equality,
Fostering confidence in the banking and financial system; and
Encouraging a corporate culture of fair dealing and competition.
The Lending Guidelines were designed based on three main objectives:
Improving data reporting;
Implementing better client protection mechanisms;
and Preventing unhealthy competition.
- Financial inclusion strategy
Financial inclusion is the access and delivery of formal financial services and products at an affordable cost, in time, catered to appropriate needs, and with legal protection. Financial Inclusion has been playing an important role to promote the country’s economic growth through raising equality and living standards. At the same time, financial inclusion is an essential policy tool for Financial Institutions, as well as for national and global policy makers.
Understanding the significance of Financial Inclusion by the Financial Institutions, ABC has formed a Financial Inclusion Committee in mid-2020 with the purpose of promoting and improving access to formal and responsible financial services in Cambodia in line with the National Strategy on Financial Inclusion (2019-2025).
ABC’s Financial Inclusion strategy is focusing mainly on:
Improving Access to Finance and Raising Financial literacy.
Capability Building (Responsible Lending and Training Certification).
Standardised Practices in the Banking and Financial Sector (BFIs Code of Conducts, and Lending Guidelines).
Client Protection to ensure sustainable financial inclusion, healthy competition, and more importantly, to increase trust in the formal financial sector.
- The Basics of Budgeting, creating and maintaining a budget
The Basics of Budgeting are really important for everyone especially in business matters. It gives us an idea on what to spend or what to save. Having a proper budgeting is important because it helps Cambodians, communities and countries reach their goals and make financial decisions effectively.
ABC together with its partners PACT Cambodia, and the Cambodia Microfinance Association, with the support from NBC, have launched nine tutorial financial literacy videos and a financial pathway guide in September 2021, which can be found at the website [ttps://www.sheinvestments.com/financial-pathways-toolkit-kh]. These financial literacy videos and financial guide are designed to contribute to access to finance, financial knowledge and information, financial management and other financial resources, as well as sharing of the importance of this knowledge to the general population, especially young women entrepreneurs. It also strengthens access to and use of official financial services with quality, efficiency and intelligence.
ABC-CMA Financial Inclusion Committees have collaborated with Sipar Cambodia to produce comic books for children, of which the content focuses on saving, spending and budgeting. Comic books are one of the main tools of Financial Inclusion Committee in raising awareness on budgeting.
Saving is crucial for everyone in wealth building and ensuring household´s financial sustainability. Furthermore, it helps enlarging the household´s reserves for financial needs for emergency. Good financial management leads to wiser decision-making in expenditures, aiming at maintaining an income, which exceeds expenses. One of the branches of financial inclusion relates to behavior and the promotion of a saving culture.
In 2021, ABC has worked with CMA, with the support from NBC, in conducting a public workshop called, “Save Money Now, To Grow your Future,” to raise public awareness about the importance of saving. In addition, ABC and CMA have also worked with FRESH NEWS to run the online talk show, of which some of the topics relate to SAVINGS, so Cambodian people can embed such knowledge. In addition, ABC has also rolled out a digital campaign to promote savings.
4.Understanding Interest Rates
As stated in our Articles of the Association, we are actively participating in social activities and corporate social responsibility programs in order to promote public relationships, public awareness on financial literacy, banking services and products, to promote consumer protection and complaint resolution, to promote banking & financial institutions code of conduct, the lending guidelines and best practices of banking.
ABC has worked with members, with the support from NBC, to roll out some main activities and workshops to raise awareness of financial literacy among the low-income segment in rural areas and the under-served in the countryside so they understand better formal financial services (interest rate, saving, and financial literacy).
In addition, ABC has joined with NBC, to promote financial literacy, especially through the dissemination workshop by Microfinance Sector in Cambodia, which were conducted at the provincial level in Mondulkiri, Banteay Meanchey, Battambang, Koh Kong, Ratanakiri and Stung Treng. These workshops served as effective platforms to promote awareness on the microfinance sector to local authorities and people, to provide opportunities to participants to raise challenges, suggestions and questions related to financial services. At the same time, NBC, local authorities and representatives of banks and financial institutions could promptly respond and provide recommendations. Local authorities and relevant stakeholders had the opportunity to collect truthful information about microfinance service usage and minimise consumer exploitation from using informal services.
- A basic no-frills banking account for making and receiving payments
All commercial banks offer clients the opportunity to open a current account and the utility of debit cards. Current accounts are the most basic bank accounts that enable customers to make and receive payments easily. Furthermore, with technological advancements from the last few years, most commercial banks offer mobile banking services, which make transfers of funds or payments easier and more streamlined at no extra costs. This enables financial inclusion, especially for those living in rural communities who may not have a physical banking presence, but who can still access to the internet.
Source: https://www.khmertimeskh.com/50985263/association-of-banks-in-cambodia-and-actions-to-cut-financial-exclusion-of-women-by-half/