Even by Asean's standards, Cambodia is seriously underbanked. A 2018 KPMG report found that just 27% of people living in the region have a bank account. In Cambodia, that figure is just 5%. However, 60% of Cambodians have internet access - about 9.6 of 16 million people. The country is poor but its economy is growing at a steady clip of almost 7% annually, while the fertility rate is 2.5 children per women.
Research by the Asian Development Bank (ADB) suggests strong opportunities for fintech in Cambodia. ADB reckons fintech could boost electronic payments by US$1 billion and credit by US$2.5 billion.
In early February, Digicro, a Cambodian microfinance firm that focuses on online loans, announced that it had raised $300,000 in seed capital from Japan's Showcase Capital. Digicro will use the funds to increase microloans to Cambodia's underbanked population. The micro loan service is accessible through the mobile app Spean Loan, Digicro's subsidiary. In a statement, Digicro said it expects to receive a business license soon, which will allow it to become fully operational
Many Cambodians cannot get a loan because they lack the necessary documentation or collateral, or live somewhere without bank branches, said Yuta Nagano, founder and CEO of Digicro, in a statement. The instant approval offered by the Spean Loan app, which uses smart technology to screen applicants, "will help micro entrepreneurs get their daily working capital and people who need emergency funds. We strongly believe we can contribute to financial inclusion in the country," he said.
To be sure, Cambodia's prevalence of cash - accounting for 70% of transactions - and fragmented payment structure pose challenges for fintechs. Analysts see payment provider Clik as a bellwether for digital finance's prospects in the country. With a $2 million war chest, Clik is currently Cambodia's best-funded fintech. If the company is successful, "it will open the door for other fintech companies to work with a streamlined payment structure," according to a December 2018 report in Asean Today.