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Financial Technology (FinTech) in Cambodia

April 2017Sim Chankiriroth, ACCA, CPA, ACMA, CGMAREPORT ON

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FinancialTechnology(FinTech)inCambodia

SettingthesceneTheterm‘FinTech’isarelativelynewandmisunderstoodtermintheCambodianfinancialservicesindustry.AsFinTechisgettingmoretractionandattention,financialinstitutionsarelookingmorecloselyatthethreatsandopportunities posedbyFinTech.Regulatorsarealsokeentounderstandmoreaboutthisnewphenomenon.

Thisreporthasbeeninformedbyin-depthinterviewswithcompaniesacrosstheCambodianFinTechspectrum,extensivesecondaryresearch,andinputsfromkeyindustryexperts.Ourhopeisthat ithelpsthereadertobetterunderstandcurrentFinTech developmentsinCambodia.

1. ThePerfectStorm

2. CambodianFinTechEcosystem

3. FinTechinCambodia4. OverviewofCambodianFinTech

Startups

Thisreportisstructuredasfollows:

With the emergence of FinTech in theKingdom, we are witnessing the start of asignificant transformation. The financial sectoris being re-imagined through the lens offinancial technology. This is the “perfectstorm”—FinTech provides an unprecedentedopportunity to close the USD 24+ billion gapbetween the demand for financial services andthe formal supply (ADB Report). Acceleratedadoption of new financial technologies, newbusiness models, and lower barriers to entryon the supply-side can make possible a massiveincrease in financial inclusion.

ThePerfectStorm

Gapbetweenfinancialserviceneeds&formalsupply

AcceleratingTechnologicaladvancement&adoption

TheKeyDriversofFinTech inCambodia

3 – FinTech In Cambodia

Source:AcceleratingFinancialInclusioninSouth-EastAsiawithDigitalFinance, ADB,2017. Itisimportanttonotethatthisresearchfocusesonfinancialexclusioninthreesegments:baseofpyramid(BoP);women;andmicro,small,andmediumenterprises(MSMEs). Hence,thegapandimpactmightbegreaterifallconstituentsareincluded

>$24BillionGapbetweenfinancialservicesneeds&formalsupply

>$2Billion

>$1Billion

>$3Billion

Additionalelectronicpaymentflows

AdditionalSavingMobilization

AdditionalCreditUptake

ThepotentialimpactofDigitalFinance

ThePerfectStormFactors

CustomerNeeds(Products)

Needsvs.FormalSupplyGap(ofTargetSegment,US$Billion)


ThePerfectStormFactors

AcceleratingTechnologicaladvancement&adoption

16m Urbanization:21%(withannualgrowthof2.65%)

TOTALPOPULATION ofpopulationundertheageof25withhighadoptionrateoftechnology50%

Morethan

+43%sinceJan2016(+2m)with45%penetrationrate

7.16mINTERNETUSERS

Laptops&Desktop

46% 49%MobilePhones

5%TabletDevices

+6%growthand173%comparedtototalpopulation

27.6mMOBILESUBSCRIPTION

4.5MILLIONmobileusersconnectedtoFacebook

3.4M 660K 440KSource:WorldFactBook (cia.gov),wearesocial.com/uk/,FacebookInc.,G-SMAIntelligence,GeekinCambodia

INFRASTRUCTUREQUALITY&ACCESSTheadvancementofnext-generationtechnologyprovidesamorelevelplayingfieldforFinTech firmsallowingthemtoworkaroundinflexiblelegacysystemsand“silo-ed”channels.Thishasloweredbarrierstoentry.ThecostadvantageisontheFinTechside.

4MobileOperators

InternetServiceProviders8


CambodianFinTechEcosystem

CREATORS

SUPPORTERS

REGULATORS

ENABLERS

Growth Compliance

“Cambodia’s FinTech scene is more nascent thansome other markets in ASEAN, but like manydeveloping ecosystems, the match has been lit,”Samuel Hall, Program Director ofStartupbootcamp FinTech. Although only a smallamount of FinTech development and investmenthas occurred in Cambodia to date, the situationis likely to change soon. Many of the necessaryelements exist in Cambodia to develop a strongFinTech ecosystem. There is every reason tobelieve the Kingdom will see a dynamicecosystem develop that can provide broadereconomic benefits.

For this report, we will look at the FinTech Ecosystemin four integrated domains, which include:


FinancialInstitutions inFinTech/Innovation

Accelerators&IncubatorsforFinTech 0Co-Working SpaceforFinTechStartup 0

BusinessAssociations&DevelopmentPartners

Events/Meetups

OfficeHours&Social

Media

Universities&Academia 0

Investments/Grants

NationalBankofCambodia

MinistryofEconomy&Finance

SUPPORTERS ENABLERS

REGULATORS

CorporatesinFinTech/Innovation + ++

+

Collaboration

+

+

TechnologyInfrastructure 4Mobile

OperatorsInternetServiceProviders8


InstitutionalTools

LoanComparisonSite

InnovativeCoreBankingforMFIs&Operators

PAYMENTS

FINANCING

INVESTECH INSURTECH

AlternativeCreditDecision&Monitoring

• MobileWallet• MoneyTransfer/

Remittance• Gateways/

AlternativePayments

• P2PPayment• CardProcessing/

POS

0

P2PLending

InvoiceDiscounting

FunctionsofFinancialServiceIndustry

Analytics/Identity/Risk

Blockchain

FinTechs inCambodiaFor this report, Cambodian FinTech Startups are groupedmainly within financial industry verticals. It is important tonote that this verticals’ list is not exhaustive. It is onlyintended for the scoping of FinTech in Cambodia at thepresent time.


Despite its nascent stage of development,FinTech in Cambodia has drawn significantattention at the regional level. TwoCambodian startups were selected amongthe top ten FinTechs in Asia byStartupbootcamp FinTech in Singapore, fortwo consecutive years.

1.RegionalRecognition 2.InclusiveFinTech

3.Corporateinvestment

Financial inclusion, particularly in thepayment vertical, is the main focus ofFinTechs in Cambodia. This will remainthe case for the foreseeable future,though alternative Financing is gainingpace and SME solutions will also beimportant.

4.FinTechprovidesaplatformforotherindustriestogrow

More than 70% of FinTechs inCambodia are funded throughinvestment arms of corporates. Hence,they are well funded from thebeginning.

The emergence of FinTechhas enabled growth inother sectors, particularlye-commerce and other techstartups.

5.Saving&Insuranceisthenextareaswithgreatpotential

Conclusion

FinTechisnotdisruptingCambodia’sfinancialservices,itisfacilitatingitsdevelopment

9– FinTech In Cambodia

FinancialTechnology(FinTech)inCambodia

OverviewofLocalFinTech Startups

1. BanhJi2. Bongloy3. Komchey4. Morakot5. Speanloy


BanhJi

Business DetailsPresent Market Currently in Cambodia

Key Client B2B

Revenue Model Subscription revenue & referral fee

CompanyDetailFounder/CEO Sim Chankiriroth

Founded 2016

Country/ City Cambodia/ Phnom Penh

www.banhji.com

BanhJiisafreeandlocalizedonlineaccountingsoftware,builtforASEANSMEs.“WeseektobetheplatformforsupportingASEANSMEssuccess, byfocusingonthreevaluepropositions:• ImprovingSMEs’real-timevisibility &insightintotheirfinancialposition

andperformance;• EnsuringSMEscompliancewithlocalaccountingandtaxrules;and• ImprovingSMEs’accesstofinancethroughdata-drivencreditevaluation

basedonthecapturedtransactionaldata,theconnectivity amongbusinesses intheplatform,andotheralternativedatapoints.”

Vertical:AlternativeCreditDecisions


Bongloy


Key Client B2B

Revenue Model Transaction fees

CompanyDetailCompany bongloy

Co-Founder/CEO Chanda Pen

Founded 2015


www.bongloy.com

Vertical:PaymentGateways/AlternativePayments

AflexibleAPI-basedpaymentsolutionthatenablesmerchantstoacquirepaymentsonline.

BongloyCheckout

Abeautiful,optimized,cross-devicepaymentform,withsupportforsingleclickpayments

BuiltforDevelopers

Whetheryou'rebuildingamarketplace,mobileapp,onlinestorefront,orsubscriptionservice,Bongloyhasthefeaturesyouneed.

Bongloy connectswithbothlocalandinternationalpaymentproviderstoenableyourbusinesstoacceptpaymentfromCambodiaandabroad.

PaymentsinfrastructureforCambodia


• CapturecreditcardtransactionsseamlesslythroughourAPIinfrastructure• Easilyintegrateswithwebandmobileapplications• OpenandsecureAPI• Scalabletechnologyallowinggrowthandflexibility

Komchey


Key Client B2B

Revenue Model Interest & Service Fees

CompanyDetailFounder/CEO Lem Chan Samrach

Founded 2017


www.komchey.com

Vertical:P2PLending

Komchey isthefirstonline SMEloanmatchingplatforminCambodia.TheiraimistoenhanceSME’saccesstofinance.Komchey’s valuepropositions encompass:• Providing SMEswithalternativefinancingforworkingcapital;• Providing reliableSMEcreditinformation;• Openingthedoorforprofessional alternativeinvestmentinCambodia.

Front-end

Creditdecisionengine

SME’s creditdatabank

Verificationservices

Paymentservices

ExternalstructuredtransactionaldataSME

workingcapitalloan

Usersinterface,Dashboard

DatadrivenLoanMatchingplatform

LoanManagementSystem

Back-end

ExternalInterface&APIs

RealtimeSMEloanmonitoring&dynamiccreditriskassessment


MorakotTechnology


Key Client B2B

Revenue Model Subscription Fees, Package Licensing Fee

CompanyDetailCo-Founder/CEO Sophorth Khuon

Founded 2014


www.morakot.it

Vertical:InstitutionalTool

Morakot is a simple, reliable core-bankingsystem for microfinance institutions andbanks. Key features include:


SpeanLoy


Key Client B2C

Revenue Model Referral Fee & Advertising

CompanyDetailCo-Founder/CEO Yuta Nagano

Founded 2017


www.spean-kh.com

Vertical:LoanComparisonSite

Speanaimstobecomeaplatformtoconnectborrowerswithfinancialinstitutions.Hereishowitworks:1) Speanprovides aninteractiveplatformforbothborrowersand

banks/MFIs tointeract;2) Forborrowers,compareandapplyforthebestloanaswellas

improvefinancialliteracy;and3) Forbanks/MFIs, searchandcontactborrowersthroughour

siteasapartofloanassessment andmarketingtool.


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