During the COVID-19 pandemic, the National Bank of Cambodia (NBC), widely known as the country's central bank, has pushed measures to encourage consumers and businesses to leverage the existing e-wallets services to prevent the spread of the virus. The government's robust programs to develop e-money and digital banking solutions as the country experienced three critical waves of the COVID-19 outbreak was long overdue - Cambodia currently stands in one of the slowest digital banking adoption relative to its neighboring countries.
The jumpstart of Cambodia's nationwide digital banking initiatives has supported the implementation of open market operations, eventually boosting economic growth by the transparent monitor of banking liquidity and financial institutions. The newly-introduced payment systems would allow more low-cost services and accessible networks, enabling rural people to participate in digital payment services through official channels.
Additionally, the Cambodian Shared Switch (CSS) system provides the country with an electronic clearing system that facilitates secure and effective electronic payments in the financial sector, easing the retail sectors to expand their businesses and collaborate with each supply chain player in delivering goods seamlessly. Today, the country has reported over 21.363 transactions using a fast payment system within six months of the technology launch, increasing the digital banking sector's growth by 373.68 percent yearly. Cambodia is forecasted to end 2021 with over 114.464 credit card payments as the number of bankable citizens increases.
Moreover, Cambodia seeks to focus on the Micro, Small, and Medium Enterprises (MSMEs) through establishing microfinance institutions focusing on lending necessary capital for homegrown businesses to get through the challenges during volatile times in the post-pandemic era. In implementing the program, Cambodia's government invites private industry players to collaborate and concerted national efforts to ensure thorough project execution. So far, the NBS has connected over 23 major financial institutions, including banks and digital banking providers, to provide payment flexibility and digital transactions. As a result, over 59 percent of Cambodians have adopted online payment transactions for online shopping activities, albeit still not as high as the value of ATM and cash transactions.
Among the collaborations was between the Cambodian Hattha Bank and Temenos Infinity to jumpstart the country's SME banking business. The Hattha Bank itself is one of Cambodia's largest commercial banks, focusing on microfinance deposit-taking institutions to offer accessible commercial and retail banking services throughout the country's areas. Through the project, Temenos Infinity has agreed to support the bank's mission in scaling to over 100.000 SMEs through initial funding and continuance business banking system during the period of five years. Temenos Infinity is widely known as the world's best-selling digital banking platform that provides digital banking features for banks to deliver fundings specifically for SMEs. Temenos will support Hattha to enhance its core system and provide instant access to businesses to propose bulk payments and loan approvals with cash management services to ensure the business' operations, eventually pushing Cambodia's economy further as it reawakens businesses in the post-pandemic era.
The public-private partnerships would also contribute to the execution of NBC's innovation, Bakong. Bakong acts as the country's official digital currency to help strengthen Khmer Riel and reduce Cambodia from the US dollar dependency.
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