Being one of Cambodia’s pioneer investors, Cambodian Public Bank Plc or Campu Bank as it is known, moors its strength on the experience built over 27 years.
“We have grown with the country through its up and downs, and gained people’s trust in us because we are here for long term. Our customer base is huge and varied due to the relationship we forged with them,” said Datuk Phan Ying Tong, regional head of Public Bank’s Indo-China operations.
The commercial bank received sound advice and support from the National Bank of Cambodia, and human resource and technical support since the establishment of its first branch in 1992.
“If there are uncertainties on the launch of new products and services, the bank would initiate consultation with the central bank for advice and clarity on its implementation,” he said.
In fact, the bank also received strong support from its parent company, Bursa Malaysia-listed Public Bank Berhad in terms of knowledge transfer and technical support during the rollout of its information technology system as well as to ensure that strong governance and controls are in place.
Cooperation with NBC
NBC has been cooperative in the implementation of the bank’s products and services such as the launch of its WeChat Pay at Campu Bank e-POS terminals to meet the demand of Chinese tourists.
“With the effective implementation of new policies, prakas and regulations by NBC from time to time, the launch of new products and services including digital initiatives is made more effective and efficient,” Datuk Phan said.
In fact, the bank is on track to launch AliPay merchant service by end of the year to provide more options for the Chinese tourists when they make their purchases through our merchants.
“All new products and services introduced by the bank have gone through stringent risk assessments by three independent parties, namely internal audit, risk management and compliance department,” he pointed out.
Stringent but sound
Campu Bank conducts a thorough review of all policies, prakas, procedures and regulations which are relevant to the bank as it is committed to ensure full compliance of rules and regulations that are set by the regulator and authorities including the Ministry of Commerce and Ministry of Economy and Finance.
Datuk Phan said although the prakas on credit risk rating is widely seen as more stringent, it augus well in the long-term as foreign investors would be more confident to invest in Cambodia due to the strong stability of the financial sector.
“Overall, the new prakas on credit risk rating is sound and reflective of the Cambodia’s trajectory economic growth as commercial banks and micro-finance institutions are required to ensure proper classification and provisioning of its loans which constituted the main assets of these institutions,” he added.
Level playing field, incentives
Over the years, NBC has cracked down on unlicensed credit companies, a move Datuk Phan commends while hoping that the effort is intensified to ensure a level-playing field for everyone.
By doing so, customers or borrowers are also protected if the industry is well regulated, he said, adding that NBC’s effort would help the lower income group.
In the same vein, Datuk Phan suggested NBC could also consider incentives for banks to provide housing loans to lower income groups so that they can own a house, otherwise known as owner occupied loans. This would help the economy as lower income groups do not have to rent homes, which in turn they would have more spending power into other meaningful essential items and it can create a so-called multiplier effect.
“So, you have developers building houses, people buying them and banks providing loans. That is more on the consumer part,” he said, referring to ways to keep the economy vibrant.
Similarly on hire purchase loans, Datuk Phan said NBC could push for the initiative to build a legal framework in order to protect banks and consumers.
In Malaysia, banks have ownership claims where vehicles are financed by financial institutions, meaning that there is a lien on the registration card.
“Therefore, customers can only transfer or sell their vehicles if the banks issue the clearance letters. This procedure can be considered to be implemented here. With a system like that in place here, we would be able to give out longer term loans.
Preparing for the future
The government has done a lot recently to reduce the cost of production for the manufacturing sector in particular, including reducing the number of public holidays etc.
Cambodian economy has been buoyant with an average GDP growth of about seven percent for the past 10 years. Going forward and to sustain that pace, it could continue to use fiscal and monetary policies including long-term measures that help to diversify the economy instead of relying on a few sectors.
Taking the experience from Malaysia, Singapore, Thailand and Hong Kong, he said various industrial sectors have evolved according to global demands and local conditions.
Seeing that Cambodia could potentially lose its Everything But Arms (EBA) status, which the current manufacturing sector is labour intensive, the sector especially should expedite the evolution process into wider range and more technical-based industries such as electrical and electronics.
“To tackle this problem, we have to make sure the human resource is ready for it. Some incentives for investors could expedite the process. This includes setting up more vocational and technical school. The workforce has to be ready for that.
“The economy will continue to grow with or without EBA” Datuk Phan added.