In an effort to mitigate the problems of overlapping loans disbursed by microfinance institutions (MFIs) and commercial banks in Cambodia, the National Bank of Cambodia, the country’s central bank, has partnered with the International Finance Corporation (IFC), the private-investment arm of the World Bank Group, on plans to launch a national credit bureau before the end of 2011. By establishing a credit bureau, Cambodian authorities expect to minimize multiple borrowing. According to In Channy, President of ACLEDA Bank, a Cambodian commercial bank that offers microfinance products, “It saves us time we spend evaluating loans, and customers will also receive loans in a shorter time. In addition, it can reduce our operational cost” [1].
A Cambodian credit bureau has been years in development, but Cambodia’s Phnom Penh Post newspaper recently cited Mr Channy as saying that the launch would take place between July and December of 2011. Currently, credit bureau operators are making preparations that include aggregating data from MFIs and banks, standardizing information and testing software.
A 49-percent stake in the credit bureau will be taken by Veda Advantage, a credit bureau developer that is based in New Zealand and has been awarded the contract to create the Cambodian credit bureau. The remaining 51 percent will be held by Cambodian banks and MFIs through two trade associations, the Association of Banks in Cambodia (ABC) and the Cambodian Microfinance Association (CMA). Veda Advantage specializes in the application of information and analytics for credit bureaus in New Zealand, Malaysia, Singapore and Saudi Arabia [2].
By Rohan Trivedi, Research Associate
About National Bank of Cambodia (NBC):
Established in 1954, the National Bank of Cambodia (NBC) is the country’s central bank. Among its functions, the NBC establishes and monitors the country’s monetary policy, supervises and regulates the country’s financial sector and issues the country’s currency.
About International Finance Corporation (IFC):
A member of the World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reports net income of USD 1.75 billion, total assets of USD 61 billion, return on assets of 3.1 percent and total investment mobilization of USD 18.4 billion to 528 projects.
About Cambodian Microfinance Association (CMA):
The Cambodian Microfinance Association (CMA) is an NGO that was formally established in 2004 by seven microfinance institutions (MFIs). According to its website, as of May 26, 2011, CMA now has 26 active members. Its main function is to strengthen communication between MFIs and other groups such as government authorities, donors, creditors and investors.
About Association of Banks in Cambodia (ABC):
The Association of Banks in Cambodia (ABC) was formed in 1994 to represent Cambodia’s private banking sector. According to its website, as of May 26, 2011, ABC’s membership includes 29 commercial banks, 7 specialized banks and the 16 members of the Cambodia Microfinance Association (CMA).
About Veda Advantage:
Veda Advantage is a private company that provides business solutions, data analytics and risk management tools for individuals and companies. Veda Advantage was established in New Zealand in 1967 and today specializes in credit-related services, focusing closely on the development of credit bureaus. Through its international division, Veda Advantage has supported credit bureaus in Cambodia, New Zealand, Saudi Arabia, Singapore and Malaysia. Financial information on Veda Advantage is not currently available on their website.
Sources and Additional Resources:
[1] Phnom Penh Post: “Credit bureau for overlap in loans” by May Kunmakara, May 6, 2011, http://www.phnompenhpost.com/index.php/2011050648925/Business/credit-bureau-for-overlap-in-loans.html
[2] Guide2: “NZ’s Largest Credit Bureau Signs Deal With Cambodia”, http://www.guide2.co.nz/money/news/business/nz039s-largest-credit-bureau-signs-deal-with-cambodia/11/21813
MicroCapital.org story, October 30, 2008, “NEWS WIRE: Cambodia: First Credit Bureau Slated to Open within 18 Months”, https://www.microcapital.org/news-wire-cambodia-first-credit-bureau-slated-to-open-within-18-months/
MicroCapital Universe Profile: National Bank of Cambodia (NBC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Bank+of+Cambodia+%28NBC%29
MicroCapital Universe Profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29
MicroCapital Universe Profile: Cambodian Microfinance Association (CMA), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Cambodian+Microfinance+Association+%28CMA%29
MicroCapital Universe Profile: Association of Banks in Cambodia (ABC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Association+of+Banks+in+Cambodia+%28ABC%29
MicroCapital Universe Profile: Veda Advantage, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Veda+Advantage
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
Similar Posts:
- MICROCAPITAL BRIEF: QR Codes to Facilitate Retail Payments Across Cambodia-Laos Border
- SPECIAL REPORT: Leveraging Financial Inclusion to Get Food Security Back on the Increase #EMW2023
- MICROCAPITAL BRIEF: Cambodia Microfinance Association, NBC Launch Project to Increase Financial Literacy, Consumer Protection
- MICROCAPITAL BRIEF: UN, EU Supporting SMEs Involved in Fisheries in Cambodia via Capfish-Capture Program
- MICROFINANCE PAPER WRAP-UP: “Land Titling and Microcredit in Cambodia: Examining the Reality of Hernando de Soto’s ‘Three Steps to Heaven,’” by Milford Bateman
