The management and staff of CPBank would like to heartiest congratulations to H.E. Chea Chanto, Governor of the National Bank of Cambodia for being awarded “The Best Central Banker of the Year, Asia-Pacific” by The Banker.
Under the governance of Chea Chanto, the National Bank of Cambodia (NBC) has successfully navigated a stormy 2020. The health crisis created by the coronavirus has been well managed, with fewer than 400 cases confirmed and zero deaths recorded (as of December 2020). However, the country has also been hit with the massive impact of lost tourist revenue, and was struck by flash floods in the autumn, impacting five million people.
Despite these conditions, Cambodia is forecast to see 1.9% growth in gross domestic product during 2020 — a respectable number in any year, but remarkable considering the hardships the country has faced.
Following the impact Covid-19 and flooding have had on businesses, the central bank stepped up to help out 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 will continue until the end of June 2021. Restructuring is permitted up to three times without any impact to the loan classification during the extension period. Further provisions include the reduction of interest rates and waiving fees. The measures taken mean the country’s rate of non-performing loans has remained low at around 2.5%.
Cambodia has also stayed on track with the promotion of digital banking. The NBC launched a digital currency, Bakong, in October 2020 to help promote financial inclusion, as many companies still pay employees in cash. The currency can support transactions made in both US dollars and Cambodian riels. Transactions are made via the Bakong app, with users scanning a barcode or entering the mobile phone number of the recipient, with all transactions conducted using blockchain. Some 20 local financial institutions are involved with Bakong. The country’s fiat currency has also been promoted this year, as Mr Chanto called for greater use of the Cambodian riel, stating it will be a way to encourage sustainable growth and develop an effective banking system, away from a dependence on the US dollar. Low-denomination dollar notes have begun to be phased out of circulation and transactions under $100 are now to be conducted in riels.