Singapore, Cambodia launch digital corridor to boost trade among SMEs

The National Bank of Cambodia and the Monetary Authority of Singapore have launched the Financial Transparency Corridor to boost trade among small and medium-sized enterprises by improving access to data and addressing financing challenges.

Key Takeaways

  • The Financial Transparency Corridor (FTC) aims to facilitate trade and investment flows between Singapore and Cambodia to benefit small and medium-sized enterprises (SMEs) in both countries.
  • Cambodian small and medium-sized enterprises face challenges in accessing financing due to collateral requirements, limited formal banking services, high interest rates and a lack of financial records or credit history.
  • Singapore is an important trade and investment partner for Cambodia, particularly in sectors such as manufacturing, real estate, services and technology.

Launch of the Financial Transparency Corridor

The National Bank of Cambodia (NBC) and the Monetary Authority of Singapore (MAS) launched the Financial Transparency Corridor (FTC) on June 18, an initiative aimed at facilitating trade between small and medium-sized enterprises (SMEs) in the two countries.

A major challenge for Cambodian SMEs is the difficulty of obtaining the capital they need to expand. A variety of factors contribute to this issue, complicating the prospects for growth. Financial institutions participating in the FTC will play a key role in addressing these challenges.

Improving financial literacy

Approximately 43% of Cambodian small business owners lack an understanding of financial products and services, which has a significant impact on their ability to effectively manage their finances and access credit – limitations that hinder their potential to grow and succeed in the business world.

To address this challenge, FTC efforts are focused on improving access to data, with the ultimate goal of helping Cambodian SMEs overcome these barriers. By improving access to relevant financial information and resources, the effort aims to empower SME owners to make informed decisions and navigate the complexities of financial management more effectively.

Furthermore, by facilitating global trade, the initiative aims to create opportunities for Cambodian SMEs to expand their markets and establish mutually beneficial partnerships with international companies. Through these efforts, the initiative aims to contribute to the overall economic development and prosperity of Cambodia’s SME sector.

The participating financial institutions are as follows:

  • Singapore:
    • Liquid Group;
    • Sing Investments and Finance
    • ANEXT Bank Ltd.
  • Cambodia:
    • Advanced Bank of Asia;
    • Acleda Bank;
    • Philip Bank;
    • Sathapana Bank
    • Wing Bank.

The Importance of Singapore as a Trade and Investment Partner

Singapore is increasing its investments in Cambodia and will be the second largest source of foreign investment in Cambodia in 2023. Furthermore, bilateral trade between the two countries reached US$1.8 billion in the first four months of 2024, up 42% compared to the same period in 2023.

Read the original article: Singapore, Cambodia launch digital corridor to boost trade among SMEs

This article was first ASEAN Briefing Produced by Dezan Shira and AssociatesThe firm assists foreign investors across Asia from offices around the world, including China, Hong Kong, Vietnam, Singapore, India and Russia. [email protected].

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