Cambodia Studies

Fintech is the Single Largest Sector in Cambodia’s Startup Scene

With 78% of the population unbanked, only 3% population owning a credit card, and 13% using mobile payment, a new report seems to indicate that Cambodia’s fintech is poised for growth.

The rise of fintech platforms and products could represent leapfrog solutions in the Cambodian market as adoption of technology can be “incredibly fast” the report claims.

With more than 50 companies active in Cambodia, the fintech sector is already the largest category in the tech startup landscape.

Some of fintech’s most developed segments include digital payments, software-as-a-service (SaaS) for financial institutions, and digital banking.

These are represented by startups such as Clik, a payment gateway and aggregator, Morakot, a developer and provider of financial software, BanhJi, an online accounting platform, Pi Pay, a mobile payment app, BongLoy, an API-based payment solution, and SmartLuy, a mobile payment app.

Cambodia tech startup landscape by category, Startup Kingdom: Cambodia’s Vibrant Tech Startup Ecosystem in 2018

Though Cambodia is fertile ground for fintech, the research notes the need of greater collaboration between stakeholders, and notes that the major question remaining open today is how to create an integrated banking ecosystem across financial institutions, consumers, merchants and regulators.

It urges banks and microfinance institutions to wake up to the opportunities of technology and digitalization, advising them to put effort into addressing consumer demand for online banking tools while continuously finding ways to reduce costs, operating efficiently and reducing risks with innovative enterprise software.

The research also recommends government agencies to introduce conducive regulations to foster innovation and strengthen targeted legal frameworks for startups and tech companies such as fintech and healthtech.

It advises for the launch of regulatory sandboxes for disruptive or new technologies, enabling fintech startups and financial firms to test innovative products in a safe environment.

The public sector should also collaborate with regional partners such as such as accelerators, incubators, government agencies and other support programs, as well as actively promote Cambodian startups in regional forums, trade shows and events.

Cambodia’s Ministry of Posts and Telecommunications is in the process of formulating a policy aimed at spurring innovation, promoting tech startups and the micro, small and medium enterprises sectors, as well as providing opportunities for Cambodia youth.

The initiative is part of the Royal Government’s Rectangular Strategy IV, which seek to diversify the Cambodian economy as well as prepare the country for the digital economy and the “Fourth Industrial Revolution.”

Cambodia’s startup ecosystem

There are over 300 active tech startups currently operating at various stage of development, according to the report. Most of them are providing digital platforms, infrastructure, and marketplaces, and focusing on consumer tech.

The research predicts that the number of startups operating in the country will double over the next two to three years. Factors responsible for this growth include increased awareness of basic digital needs and growth of market opportunities related to the digital economy as consumers become more tech-savvy.

Global and regional tech companies will continue to enter the market as they saturate their own market and search for new customers. At the same time, they will serve as a training ground for future founders.

The report also notes the steady rise in startup funding since 2015. Between 2015 and 2018, the number of publicly-disclosed startup deals more than doubled, it says.

Startup Kingdom: Cambodia’s Vibrant Tech Startup Ecosystem in 2018

Startup Kingdom: Cambodia’s Vibrant Tech Startup Ecosystem in 2018

It concludes that Cambodia’s digital future is bright with stakeholders open to partnerships, mindsets shifting, and a real energy and momentum present to develop the tech sector.

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