Cambodia: Acleda Applauds NBC’s MoU with Myanmar

Jan 2016
Cambodia, January, 21 2016 - The country’s largest lender by branches, Acleda Bank, has welcomed the move by the National Bank of Cambodia to forge closer ties with the Central Bank of Myanmar as Acleda moves to expand its business in Myanmar’s credit-deficient market.

So Phonnary, executive vice president of Acleda Bank, told Khmer Times that the recently signed memorandum of understanding (MoU) to increase cooperation between the National Bank of Cambodia and Myanmar’s central bank will benefit Cambodia’s commercial banks, especially Acleda, which has a microfinance business in the country.

The MoU will give Acleda firmer ground to stand on in Myanmar, she said, adding that the expansion of Cambodia’s banking and financial sector puts lenders here in a good position to expand in Myanmar. Access to credit – especially rural areas – is scant in Myanmar, and its banking system is liberalizing at a very slow pace, financial experts say.

“We can say that Myanmar will provide more opportunities for banking operators and the MoU will make it easier for us to operate,” Ms. Phonnary said.

She was referring to the MoU signed on Wednesday morning between the National Bank of Cambodia and the Central Bank of Myanmar to strengthen cooperation and share knowledge and technical support to strengthen regional integration and open the way for commercial banks from each country to operate in both countries as well as the region.

NBC deputy governor Neav Chanthana said that the MoU was a crucial step towards bilateral cooperation in the banking and finance sector. It facilitates the exchange of information, experience and knowledge among banking sectors in countries in the region which are at different development stages, she said.

“Through this MoU, the management and technical officials of our central bank will continue to cooperate closely and more effectively [with their counterparts in Myanmar], and the NBC will support commercial banks to open representative offices in each country to support development and economic growth,” Ms. Chanthana said.

Ms. Chanthana added that Cambodia's economy remains stable at the macro level with inflation under control and exchange rates stable.  About 51 percent of the adult population now has formal financial services and the banking sector has developed rapidly and integrated into the regional and global financial system. The sound development of this sector is crucial to promoting economic activity in Cambodia and the NBC plays a vital role in preserving macroeconomic and financial stability.

Central Bank of Myanmar deputy governor U Soe Min said the MoU is important because it allows officials at the Central Bank of Myanmar to learn from the NBC, which has experience in liberalizing its banking and financial sector.

Acleda bank announced that it had opened a wholly owned subsidiary, ACLEDA MFI Myanmar Co. Ltd. in Myanmar in February 2013, with a license from the Myanmar Microfinance Supervisory Committee. The license gave it permission to operate microfinance services in 15 townships of Yangon Region, according to a statement from Acleda. As of the end of last year

It had six offices in Yangon – Myanmar’s commercial hub, and former capital – with 158 staff and more than 33,000 customers. Its total loan portfolio was $7,865,572 as of the end of last year.

Ms. Phonnary said one challenge that Acleda faces in Myanmar is that it can only use the domestic currency, the kyat, for lending and deposits.

Banking experts in Myanmar have said they are watching Acleda’s moves in the country very closely as its expansion could help alleviate the chronic lack of credit that is inhibiting the growth of that country’s agricultural sector.

Source : Khmer Times

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