Under the governance of Chea Chanto, the National Bank of Cambodia (NBC) has successfully navigated a stormy 2020.
As a result he has been honoured as Asia-Pacific’s central banker of the year by prestigious UK-based publication The Banker.
Among the maelstrom of challenges faced this past year were the pandemic crisis and the nation’s being massive impacted by lost tourist revenue and flash floods that affected 5 million people.
Despite these conditions, Cambodia is forecast to see 1.9 percent growth in gross domestic product in 2020, a respectable number in any year, but remarkable considering the hardships the country has faced.
Following the pandemic and flood impact on businesses, the central bank stepped up to help companies experiencing financial hardship. The NBC informed the Association of Banks in Cambodia and the Cambodia Microfinance Association that loan restructuring measures introduced in March 2020 would continue through to the end of June in 2021.
Restructuring is permitted up to three times without any effect on loan classification during the extension period. Further provisions include the reduction of interest rates and the waiving of fees. The measures taken contributed to the country’s rate of non-performing loans remaining low at around 2.5 percent.
The NBC launched a blockchain-based digital infrastructure known as Bakong in October 2020 to help promote financial inclusion. Bakong provides the digital backbone for inter-bank digital transfers which will empower financial inclusion in a country where many companies still pay their employees in cash. Bakong can support transactions made in both US dollars and riels. Some 20 local financial institutions are involved with Bakong.
The country’s fiat currency has also been promoted this year, with Chanto calling for greater use of the riel, saying it will be a means of encouraging sustainable growth and developing an effective banking system no longer dependent on the US dollar. To that end, low-denomination dollar notes have already begun to be phased out of circulation.