In Cambodia, the trend of maintaining multiple bank accounts is more prevalent than ever before. On average, each Cambodian adult holds between 2 to 3 bank accounts. Data from the National Bank of Cambodia (NBC) reveals that for the first half of 2024, the Kingdom had 21.3 million deposit accounts, despite having only 9.8 million adults. This results in an average of 2.3 bank accounts per adult, highlighting a significant rise from previous years.

This increase in bank accounts raises an important question: Why do Cambodians have so many bank accounts? To understand this trend, we need to delve into several contributing factors, including historical practices, financial strategies, and the increasing digitization of financial services in Cambodia.

The Evolution of Banking in Cambodia: A Historical Perspective

Historically, inter-banking charges played a major role in the proliferation of bank accounts among Cambodians. Before the introduction of the Bakong system in 2016, transferring money between different banks was expensive due to high transaction fees. To avoid these fees, many Cambodians would open accounts with multiple banks, often aligning their accounts with those used by their families or spouses. This practice ensured cheaper fund transfers within the same bank network, leading to households typically maintaining 3-5 bank accounts.

While the introduction of the Bakong system—a blockchain-based interbank payment system—has reduced the need for multiple accounts due to its lower transaction fees, the habit of having multiple accounts has persisted for several reasons.

The Role of Loans and Credit in Multiple Bank Accounts

Another significant factor contributing to the high number of bank accounts in Cambodia is the management of loans and credit. According to a study by the Cambodia Microfinance Association (CMA) and M-CRIL, about 87 percent of borrowers have one to two loans, and a small but notable group even holds four or more loans. These loans often come from different financial institutions, including microfinance institutions (MFIs) and traditional banks. To manage these different loans efficiently, many Cambodians find it necessary to maintain multiple bank accounts, each tied to a specific loan or credit line.

This strategy allows them to manage their debts more effectively, keeping track of repayments and interest rates while maintaining a clear separation between different financial obligations.

Access to Financial Services and Gender Dynamics

The expansion of financial services across Cambodia has also contributed to the increase in the number of bank accounts. A substantial 48 percent of adult borrowers in Cambodia have access to at least one formal financial service, such as a savings account, credit, or microinsurance. Moreover, 67 percent of adults in Cambodia use some form of formal financial service, according to a report by the United Nations Capital Development Fund (UNCDF).

Interestingly, there are also gender dynamics at play. The data suggests that a larger proportion of women have access to financial services compared to men (51 percent vs. 45 percent). Women in Cambodia are often more inclined to save and manage daily financial transactions, while men are typically more confident in making borrowing decisions and managing deposit accounts with financial institutions. This discrepancy may partly explain why women are more likely to hold multiple accounts to manage different aspects of their financial lives effectively.

The Digital Banking Boom and Mobile Connectivity

The rapid growth of mobile banking has further fueled the rise in the number of bank accounts. In 2023, mobile banking transactions in Cambodia increased by 11 percent, reaching 746.7 trillion riels ($164 billion), up from 672.4 trillion riels ($183 billion) in 2022. This growth can be attributed to the widespread use of mobile phones in Cambodia. According to Digital 2023 Cambodia, there were 22.16 million active mobile connections in Cambodia in the first quarter of 2023, which is 131.5 percent of the total population. This suggests that, on average, each adult in Cambodia owns more than two mobile connections.

With mobile penetration rates exceeding 100 percent, digital banking has become a vital component of daily life for many Cambodians. The ease of managing finances through mobile apps and the growing trust in digital transactions have encouraged many to open multiple bank accounts to take full advantage of these digital services.

The Role of Financial Literacy and Digital Awareness

NBC, along with the Association of Banks in Cambodia (ABC), has played an active role in promoting financial literacy and encouraging the use of digital banking services, including the Bakong system. These initiatives have not only improved access to banking services but also fostered a culture where owning multiple bank accounts is seen as a practical financial strategy.

A Reflection on Financial Behavior in Cambodia

The reasons behind the high number of bank accounts in Cambodia are diverse and multifaceted. From historical practices aimed at avoiding inter-banking fees to strategic financial management of loans and the surge in digital banking, each factor has contributed to this trend. Additionally, gender dynamics and the widespread use of mobile phones have further shaped financial behaviors, leading to the proliferation of multiple bank accounts.

As Cambodia continues to develop its financial infrastructure and increase financial literacy among its population, it will be interesting to see how these trends evolve.

What are your thoughts? Do you use multiple bank accounts in Cambodia, and if so, why? Share your experiences and let us know how you manage your finances!

Cambodia is rapidly becoming a hotspot for investors looking to capitalize on emerging markets in Southeast Asia. Over the past year, the country has witnessed a remarkable surge in investment activities, reflecting growing confidence among investors in Cambodia’s economic stability and future prospects. This newfound confidence is driven by several factors, including favorable government policies, infrastructure improvements, and a positive investment climate. In this blog post, we’ll explore these factors in detail and examine how they have contributed to boosting investor confidence in Cambodia.

1. A Surge in Investment Activities: The Numbers Speak for Themselves

The first year of Cambodia’s new government saw a notable increase in investment activities, signaling a robust economic outlook. According to the Council for the Development of Cambodia (CDC), the country registered 237 projects worth over $6 billion between August of last year and July of this year. These investments spanned key sectors such as manufacturing, tourism, agriculture, and real estate.

This surge in investments is not just a fleeting trend; it represents a strong vote of confidence from both local and international investors in Cambodia’s long-term economic potential. The significant rise in investment activities suggests that the country is on a stable path toward sustainable development.

2. Government Policies: A Catalyst for Economic Growth

A crucial factor behind the growing investor confidence is the Cambodian government’s proactive approach to creating a business-friendly environment. The government has implemented a range of policies aimed at promoting economic development, which has been instrumental in attracting foreign direct investment (FDI).

Lim Heng, Vice-President of the Cambodia Chamber of Commerce, highlights the government’s unwavering commitment to economic development as a key reason for this positive trend. “The government’s efforts to create a conducive business environment have played a pivotal role in attracting investors,” Heng noted. These efforts include the establishment of special economic zones, simplification of administrative procedures, and provision of incentives for investors.

In addition to these initiatives, Cambodia has entered into several bilateral and multilateral trade pacts and trade preference schemes, making it an attractive destination for global investors. These agreements have opened up new markets for Cambodian products and services, further enhancing the country’s appeal to foreign investors.

3. Infrastructure Improvements: Building the Foundation for Growth

Infrastructure development is another significant factor contributing to the surge in investor confidence in Cambodia. Over the past few years, the Cambodian government has prioritized infrastructure improvements, including the construction of roads, bridges, and ports, which are essential for economic growth and development.

Sun Chanthol, Deputy Prime Minister and CDC’s First President, emphasized the importance of these improvements in creating a favorable environment for businesses and foreign investors. “Improving infrastructure, reduced bureaucracy, and rising trade have created a favorable environment for businesses and foreign investors,” Chanthol said.

These infrastructure projects not only facilitate trade and commerce but also attract foreign direct investment by reducing the cost of doing business in Cambodia. With better roads and ports, goods can be transported more efficiently, leading to increased trade and economic activity.

4. Economic Diplomacy: Strengthening Ties with Key Global Players

The Cambodian government’s economic diplomacy efforts have also played a crucial role in enhancing the country’s investment landscape. Prime Minister Hun Manet and other high-ranking officials have made several overseas visits to strengthen diplomatic ties and promote Cambodia’s investment and business environment. These visits have covered key countries such as the United States, China, Japan, Switzerland, Australia, Vietnam, Thailand, Laos, Singapore, Malaysia, France, Indonesia, and South Korea.

Ky Sereyvath, Director-General of the Royal Academy of Cambodia’s Institute of China Studies, noted the impact of these diplomatic efforts in attracting investors from major economies. “Significant progress has been made in the first year, particularly in attracting investors from major economies, including the United States, Japan, South Korea, and European nations,” Sereyvath told Khmer Times.

These diplomatic efforts have not only helped to attract more investors but have also positioned Cambodia as a key player in regional and global trade, thereby boosting investor confidence in the country’s economic prospects.

5. Historical Context: Understanding Cambodia’s Economic Journey

To fully appreciate the factors driving investor confidence in Cambodia today, it is essential to understand the country’s economic history. Cambodia’s journey toward becoming an attractive destination for investors has been shaped by its resilience and adaptability in the face of various challenges.

Post-Conflict Recovery and Economic Reforms

Following decades of conflict and instability, Cambodia embarked on a path of recovery and economic reform in the early 1990s. The introduction of market-oriented reforms and the establishment of a constitutional monarchy created a more stable political and economic environment, which was crucial for attracting foreign investment.

The country’s integration into regional and global economic frameworks, such as ASEAN and the World Trade Organization (WTO), further reinforced its commitment to economic openness and reform. These efforts laid the groundwork for the economic transformation that Cambodia is experiencing today.

Continued Growth and Development

Over the past two decades, Cambodia has maintained a steady pace of economic growth, driven by strong performances in sectors such as garments, construction, and tourism. This growth has been supported by a favorable demographic profile, with a young and dynamic workforce that is increasingly skilled and educated.

The government’s focus on infrastructure development and improving the business environment has also played a critical role in sustaining this growth. By investing in essential infrastructure and reducing bureaucratic hurdles, Cambodia has positioned itself as an attractive destination for investors looking for new opportunities in Southeast Asia.

6. Future Prospects: A Promising Outlook for Investors

Looking ahead, Cambodia’s economic prospects remain bright. With continued government support and a favorable business environment, the country is well-positioned to achieve sustainable economic growth and development. The government’s commitment to maintaining a stable macroeconomic environment and pursuing structural reforms will be key to attracting further investment and driving long-term growth.

Investors are also likely to benefit from Cambodia’s strategic location in Southeast Asia, which provides easy access to major markets in the region. With the right mix of policies and continued investment in infrastructure, Cambodia has the potential to become a hub for trade and investment in the region.

As we have seen, several factors contribute to the growing investor confidence in Cambodia’s economy, including government policies, infrastructure improvements, and economic diplomacy efforts. The country’s economic history and ongoing reforms also play a significant role in shaping its investment landscape.

What are your thoughts on the factors driving investor confidence in Cambodia? Do you think the country’s economic policies and initiatives are sufficient to sustain long-term growth? Share your views in the comments below!

History of Takeo Province

Takeo Province, known as the “Cradle of Khmer Civilization,” boasts a rich history deeply rooted in ancient Khmer culture. Once the heartland of the Funan Kingdom, one of Southeast Asia’s earliest states, Takeo has long been a region of historical significance. Today, the province covers an area of 3,563 square kilometers and is home to over 890,000 people, making it a key agricultural hub in Cambodia. The province is bordered by Kandal, Kampong Speu, Kampot, and the country’s southern neighbor, Vietnam, making it strategically positioned for trade and economic activities.

Takeo has recently seen significant developments, with the appointment of a new provincial governor, Vy Samnang, who has been actively involved in pushing for infrastructural and economic growth. The governor’s recent endorsement of a Special Economic Zone (SEZ) in Bati district is a testament to this commitment to development. The SEZ is expected to play a crucial role in boosting the province’s economy by creating jobs, reducing migration, and attracting more foreign investments .

Reason 1: Proximity to the New Techo International Airport

One of the primary reasons for establishing the SEZ in Bati district is its proximity to the upcoming Techo International Airport. This new airport, located in Kandal province and expected to be operational by 2025, is set to become Cambodia’s largest and most advanced airport, significantly enhancing the country’s connectivity to global markets. The close distance between Bati district and the new airport will provide a logistical advantage for businesses operating within the SEZ, allowing for efficient transportation of goods and easy access to international markets. This strategic location is likely to attract both local and international investors who seek to leverage Cambodia’s growing infrastructure for business expansion .

Reason 2: Connectivity to Highways and Seaports

Bati district’s connectivity to major highways and seaports is another compelling reason for the SEZ’s establishment. The district is strategically located near National Road No. 2, which connects Phnom Penh to Takeo and further to the Cambodian coast – Kampot Multipurpose Port, providing seamless transportation links to key economic zones. Additionally, the Funan Techo Canal project, which is set to revolutionize transportation and trade in Cambodia, will further enhance Bati’s appeal as a logistics hub. The canal will facilitate the movement of goods between inland areas and seaports, reducing transportation costs and transit times for businesses operating in the SEZ .

Reason 3: Proximity to Phnom Penh

Bati district is situated just 35 kilometers from Phnom Penh, the capital of Cambodia. This proximity makes it an ideal location for companies in the SEZ to transport their products and services to the capital and beyond. The short distance to Phnom Penh ensures that businesses can easily access the city’s markets, government institutions, and financial services, which are crucial for the smooth operation of any enterprise. Moreover, as Phnom Penh continues to expand rapidly, the demand for goods and services from nearby areas like Bati is expected to rise, further boosting the SEZ’s potential for success.

Reason 4: Strategic Location Amidst Phnom Penh’s Rapid Expansion

Phnom Penh’s rapid urbanization and expansion have led to increased demand for industrial and commercial spaces in nearby regions. Bati district’s strategic location on the outskirts of the capital makes it a prime candidate for industrial development. As land prices in Phnom Penh soar, companies are looking for alternative locations that offer the same benefits at a lower cost. The establishment of the SEZ in Bati district provides an attractive option for businesses seeking to capitalize on the economic opportunities offered by Phnom Penh’s growth while avoiding the high costs associated with operating within the city .

Additional Reasons for Establishing the SEZ in Bati District

Beyond the reasons mentioned above, there are other factors that make Bati district an ideal location for an SEZ. The local government’s commitment to supporting investors, as evidenced by Governor Vy Samnang’s active promotion of the SEZ, ensures a favorable business environment. The SEZ is expected to create thousands of jobs for the local population, reducing migration to urban areas and contributing to the overall economic development of Takeo province. Additionally, the involvement of the Chinese Chamber of Commerce of Chaoshan in the SEZ project highlights the strong international interest in investing in the region, further boosting its economic prospects .

Conclusion

The establishment of a Special Economic Zone in Bati district, Takeo province, is a strategic move that leverages the region’s historical significance, strategic location, and proximity to key infrastructure developments such as the Techo International Airport, major highways, and the Funan Techo Canal. With the support of the local government and international investors, the SEZ is poised to become a major economic driver for Takeo province, creating jobs, boosting trade, and contributing to Cambodia’s overall economic growth. As Phnom Penh continues to expand, Bati district’s SEZ will play a crucial role in supporting the capital’s growing demand for industrial and commercial activities.

The digital landscape in Cambodia has evolved rapidly over the past decade, opening up a wealth of opportunities for individuals to generate income online. From traditional business models to more innovative approaches, the possibilities are vast. Whether you’re a tech-savvy entrepreneur or a creative content creator, the internet offers several avenues for making money online in Cambodia. Below are some of the best ways to do so.

1. Product/Service Affiliation

Affiliate marketing is a lucrative option for anyone looking to make money online in Cambodia. By partnering with companies to promote their products or services, you can earn a commission for every sale made through your referral link. This model is particularly popular in sectors like e-commerce, travel, and digital services. Cambodian affiliates can join global platforms like Amazon Associates or local programs offered by regional e-commerce giants. The key to success in affiliate marketing is to choose products that align with your audience’s interests and needs.

2. Consultation and Training Services

With the rise of digital communication tools, offering consultation and training services online has become more accessible. Whether you’re an expert in digital marketing, business strategy, language instruction, or any other field, you can monetize your knowledge by offering online consultations or training sessions. Platforms like Zoom and Google Meet make it easy to connect with clients anywhere in the world. In Cambodia, there’s a growing demand for English language tutors, business consultants, and IT training, making this a viable option for skilled professionals.

3. Social Media Content Creators

The boom of social media in Cambodia has paved the way for content creators to earn money through various channels. Whether you’re a YouTuber, Instagram influencer, or TikTok star, there are multiple monetization opportunities available. Content creators can earn through brand partnerships, sponsored posts, and even direct fan donations through platforms like Patreon. In Cambodia, social media is a powerful tool for reaching a large audience, and with creativity and consistency, content creators can turn their passion into a profitable career.

4. Software, Website, and Mobile App Development Services

The demand for digital solutions is increasing in Cambodia, creating a robust market for software, website, and mobile app development services. Whether you’re a freelance developer or part of a larger agency, there are plenty of opportunities to make money online by offering these services. Many Cambodian businesses are seeking to establish an online presence, and they require skilled developers to create and maintain their digital platforms. This sector is not only profitable but also offers the chance to work on diverse and innovative projects.

5. Monetization from Facebook, YouTube, and Google AdSense

Facebook, YouTube, and Google AdSense offer straightforward ways to monetize your online presence. If you have a website, blog, or popular social media channel, you can earn money through ad placements. YouTube creators, for instance, can earn through ads, memberships, and Super Chats, while Facebook offers monetization options for video content and in-stream ads. In Cambodia, where internet usage is steadily increasing, building a substantial online audience can lead to significant earnings through these platforms.

6. Selling Products Online

E-commerce is thriving in Cambodia, making it an excellent time to start selling products online. Whether you’re selling handmade crafts, clothing, electronics, or even digital products like eBooks and courses, platforms like Shopify, WooCommerce, and local marketplaces such as Khmer24 and DaraBuy can help you reach a wide audience. Dropshipping is another popular model that allows you to sell products without holding inventory. By leveraging social media and digital marketing, you can create a successful online store catering to the Cambodian market or even international customers.

Conclusion

The digital era has unlocked numerous ways to make money online in Cambodia. From affiliate marketing to offering consultation services, creating social media content, developing software, monetizing popular platforms, and selling products online, there’s a method to suit various skills and interests. The key to success in the online world is to remain adaptable, continually improve your skills, and stay updated with the latest trends and technologies.

Have you tried making money online in Cambodia? Share your thoughts and experiences in the comments below. Your insights could help others find their path to success in the digital economy!

Embracing Digital Evolution: How Bakong Tourists App is Transforming Cambodia’s Tourism Experience?

Bakong Tourists App is officially launched today – August 19, 2024.

As Cambodia continues to evolve into a digital-savvy nation, the launch of the Bakong Tourists app by the National Bank of Cambodia (NBC) marks a significant milestone in enhancing the tourism experience. This new mobile payment system, inaugurated on August 19, aims to streamline transactions for foreign tourists while promoting the use of the local currency, the riel, and bolstering the tourism sector. But what does this mean for the future of tourism in Cambodia, and how will it affect travelers and locals alike?

The Convenience Factor: A Digital Shift in Payments

The Bakong Tourists app offers a new level of convenience for visitors, enabling them to make payments at over 3.3 million locations across Cambodia. From bustling cities like Phnom Penh to the historic streets of Siem Reap, even small vendors and street sellers are equipped with QR codes to accept payments. This digital shift eliminates the need for tourists to carry large amounts of cash, reducing the risk of loss or dealing with damaged banknotes, a common issue for many travelers.

NBC Governor Chea Serey highlighted the app’s user-friendliness and security, ensuring that tourists can easily navigate the payment system without facing language barriers or complex procedures.

But with any new system, the question remains: Will this digital transition be embraced by all tourists, or will traditional cash payments still hold sway?

A Step Toward Promoting the Riel

One of the primary goals of the Bakong Tourists app is to promote the use of the riel among foreign visitors. Cambodia has long been known for its dual-currency system, where both the US dollar and the riel are widely accepted. However, encouraging the use of the local currency not only supports the national economy but also reinforces Cambodia’s cultural identity.

The app would encourage tourists to exchange for Khmer currency and use it directly. He emphasized the importance of this shift in maintaining Cambodia’s sovereignty and national identity, Khieu Thy, president of the Khmer Angkor Tourist Guide Association.

However, the challenge lies in changing the mindset of tourists who are accustomed to using foreign currencies in Cambodia. Will the convenience of the Bakong Tourists app be enough to persuade them to make the switch?

Addressing Potential Challenges: Is the App Ready for All?

While the Bakong Tourists app promises ease of use and wide accessibility, there are concerns about its practicality, especially for older tourists or those less familiar with digital platforms. Met Thong, a freelance tour guide in Siem Reap, voiced concerns that the app might add unnecessary complexity for some visitors, who may find it easier to use cash.

The NBC has taken steps to ensure the app is as user-friendly as possible, with support available through WhatsApp and Telegram for any issues that arise.

Additionally, tourists can register and verify their identity with the help of tourist agents, hotels, or tour operators, allowing them to spend up to $3,000 per day.

Despite these measures, the success of the app will largely depend on its ability to provide a seamless experience for all users. Will the convenience of digital payments outweigh the comfort of using cash for tourists? Or will the app face resistance from those who prefer traditional methods?

Beyond Borders: Expanding the Reach of Bakong Tourists

In a unique twist, the Bakong Tourists app extends its usability beyond Cambodia’s borders. Travelers continuing their journey to neighboring countries like Thailand, Laos, and Vietnam can use the funds in their Bakong account, making it a versatile tool for Southeast Asia exploration.

This cross-border functionality adds an extra layer of convenience for tourists, potentially making Cambodia a more attractive destination for travelers looking for a hassle-free payment system throughout the region.

A Digital Future for Cambodian Tourism?

As Cambodia embarks on this digital transformation in its tourism sector, the Bakong Tourists app represents a bold step toward modernizing payment systems and promoting the riel. However, its success hinges on how well it is received by the millions of tourists who visit Cambodia each year.

You can download Bakong Tourist Apps here: Andriod & iOS

What do you think about this new development? Will the Bakong Tourists app enhance your travel experience in Cambodia, or do you prefer the simplicity of cash? Share your thoughts and join the conversation.

Let’s discuss how this digital evolution could shape the future of tourism in Cambodia.