Cambodians have 2-3 bank accounts on average
Cambodians have 2-3 bank accounts on average
Cambodians on average seem to have 2 to 3 bank accounts going by data with the National Bank of Cambodia (NBC). For the first half of 2024, the Kingdom had 21.3 million deposit accounts as against 9.8 million adults. Meaning for every adult there are 2.3 bank accounts.
As per data with the Central Bank, this is an increase of 11 percent from 19.2 million accounts in 2023. The deposit account growth is sharper than the growth in loan accounts. Loans accounts grew only 2.5 percent to 4 million in the first half of 2024, compared to 3.9 million in 2023. Consumer loans also increased only 2.6 percent to 238.1 trillion riels ($58.9 billion), which seems to follow last year’s trend of low credit growth. In 2023, loan growth hit its lowest in two decades at 4.8 percent to $57.6 billion.
There are multiple reasons for the plethora of bank accounts, say market participants. The first reason was inter-banking charges, customers were charged transaction fees on each transfer they made to family members or friends. In the days before Bakong came into existence in 2016, high inter-banking charges meant that many customers would open accounts with the bank their parents or spouse was banking with just to make fund transfers cheaper. So many normal middle-class households had on average 3-5 bank accounts.
Apart from this, Cambodians have more than one bank account when they have multiple lines of loan or credit taken out. As per a study by the Cambodia Microfinance Association (CMA) and M-CRIL, as high as 87 percent of borrowers have one to two loans. And the study found that there’s a minority even taking out as many as four or more loans. Industry experts say that this could point to a situation where the same customer is taking multiple loans from different microfinance institutions (MFIs) and banks.
As high as 48 percent of adult borrowers in Cambodia have access to at least one formal financial service, which could be a savings account, credit or microinsurance account, as per CMA data.
And as per a UNCDF report, formal financial services are being used by 67 percent of adults in Cambodia. A larger proportion of women have access to financial services compared to men (51 percent vs 45 percent). “Women are generally more likely to take saving decisions and manage financial transactions better while men are more likely to be confident in borrowing decisions and operating deposit accounts with financial institutions (MDIs/banks),” Ritika Kathuria, lead researcher for the M-CRIL study, told Khmer Times. She said, “There is also a difference in the ownership of mobile phones with nearly 1.5 times more male ownership than female. In engaging with a rapidly digitizing sector like financial services this could be a constraint for women in the short to medium term.”
Bankers say the rise in mobile phones has also contributed greatly to the increase in bank accounts in the country. Mobile banking grew 11 percent to 746.7 trillion riels ($164 billion) in 2023 from 672.4 trillion riels ($183 billion) in 2022. “For Internet banking, these are usually transacted by companies so it depends on the business flow. However, for mobile banking, it is transacted nationwide by the public with almost all individuals in Cambodia doing it,” Richard HC Liew, CEO, Bridge Bank Plc, told Khmer Times.
NBC and the banks have been active in the promotion and usage of Bakong, say market participants. “NBC has been at the forefront of this with Association of Banks in Cambodia (ABC) in promoting and educating the public in using mobile banking via Bakong and the results have been very positive and encouraging. And we are seeing the fruits of this in the increase in mobile banking transactions in Cambodia. In fact, I believe the mobile penetration rate in Cambodia is above 100 percent i.e. 1 person has more than 1 mobile phone in Cambodia,” said Liew.
As per a report by Digital 2023 Cambodia, for the first quarter of 2023, Cambodia had a whopping 22.16 million active mobile connections. Given Cambodia’s population is just over 17 million, this figure makes active mobile connections at 131.5 percent of the total population. Meaning for every one person in Cambodia, there are 1.3 mobile connections and for every adult in Cambodia that’s an active 2.2 mobile connections.
