Cambodia’s financial services sector presents one of the more paradoxical investment cases in the country’s economy: a genuinely world-class digital payments infrastructure sitting alongside a banking and microfinance system still working through a significant asset-quality correction. The comparative advantage is real but narrowly located — concentrated in payments infrastructure, fintech innovation built on top of that infrastructure, and financial-inclusion reach, rather than in the underlying health of loan portfolios. Understanding this split between infrastructure strength and balance-sheet stress is the starting point for any serious assessment of where Cambodia’s financial-services opportunity actually lies for the next five years.
1. The Core Advantage: Bakong and Digital Payments Infrastructure
Cambodia’s clearest and most defensible comparative advantage in financial services is the National Bank of Cambodia’s Bakong system, a blockchain-based payment infrastructure that has fundamentally restructured the country’s payment architecture since its 2020 launch. Bakong provides real-time gross settlement across both Cambodian riel and US dollars, reducing interbank settlement times from one to three business days down to under three seconds. By 2025, the country had registered 18.9 million e-wallet accounts, with Bakong transactions reaching 1.3 billion — 771 million in Khmer riel and 554 million in US dollars. Transaction volumes grew 78% year-on-year in 2024 alone.
What makes Bakong strategically significant for investors is not simply its scale but its openness: it provides a level settlement playing field where a small fintech startup can access the same payment rails as the largest commercial bank. Its cross-border corridors with Thailand’s PromptPay, Malaysia’s DuitNow and China’s Alipay have reduced remittance costs by an estimated 40–60% compared with traditional wire transfers, positioning Cambodia as a genuine regional innovator in interoperable payments rather than merely a fast-follower. Few countries in Southeast Asia, let alone among Cambodia’s income peers, can claim comparable central-bank-led payments infrastructure.
2. Sources of Comparative Advantage
Central-bank-led innovation and regulatory sandboxing
The National Bank of Cambodia has taken an unusually active innovation posture for a central bank at Cambodia’s income level, launching a regulatory sandbox in 2023 that provides fintech startups a structured environment to test new products under supervisory oversight before full licensing. Combined with the government’s Financial Technology Development Policy 2023–2028, this signals sustained institutional appetite for fintech experimentation rather than a purely reactive regulatory posture.
A large, already-active fintech ecosystem
An estimated 70–90 fintech firms currently operate in Cambodia, spanning payment providers and e-wallets (Wing, TrueMoney, Pi Pay, Clik) through to digital lenders, insurtech startups and payments infrastructure players. This is a genuinely populated ecosystem rather than a nascent one, giving new entrants existing partners, competitors and a proven local user base to build against.
High mobile and internet penetration
Internet penetration in Cambodia has surpassed 60% according to GSMA data, while mobile subscriptions exceed 120% of the population. This digital reach, achieved through a mobile-first, leapfrogging pattern that bypassed much of the traditional branch-banking build-out seen in more mature markets, gives financial-services providers a large addressable digital population without the legacy-infrastructure costs that weigh on more established banking systems.
Dollarization as a structural stability feature
Cambodia’s heavily dollarized financial system, with US dollars used widely alongside the Cambodian riel, has shaped fintech development particularly in payments and remittances. While dollarization limits the National Bank of Cambodia’s monetary-policy independence, it also provides investors and depositors a degree of currency-risk insulation that few frontier markets offer, a factor that continues to support foreign confidence in Cambodian financial institutions.
Deep, if imperfect, financial inclusion reach
Cambodia’s financial system now comprises 59 commercial banks, 89 microfinance institutions, four specialised banks and 89 rural credit institutions, with deposit accounts having reached 18.9 million and credit accounts 3.9 million by 2023 — a remarkable expansion from under 5% of adults holding an account in 2011. This reach into underserved rural and low-income populations, even with its accompanying risks, represents a genuine base of financial inclusion that later-stage digital and insurance products can build upon.
3. The Balance-Sheet Stress
Cambodia’s financial-services comparative advantage cannot be assessed honestly without confronting the sector’s asset-quality problem directly. The National Bank of Cambodia’s 2025 annual report shows outstanding loans rising only 4.1% year-on-year to USD 63 billion, while deposits grew a stronger 14.7% to USD 65.7 billion — but the non-performing loan ratio across the banking and financial system reached 8.9%, a level that reflects sustained credit stress rather than a temporary blip. Separate ASEAN+3 Macroeconomic Research Office estimates placed non-performing loans at around USD 4.7 billion, or 8.1% of total loans, by June 2025, described as the highest level in years.
The roots of this stress lie substantially in the microfinance sector’s rapid, supervision-outpacing expansion. The National Bank of Cambodia’s licensing regime helped the number of banks and microfinance institutions grow more than fourfold, from 36 to 157, over 14 years, while the aggregate microfinance loan portfolio reached approximately USD 18 billion — around 40% of national GDP — with aggressive credit expansion contributing to borrower over-indebtedness and conduct failures. In 2023, NPL ratios stood at 5.4% in banking and 6.7% in microfinance; both have since risen further. A parallel structural shift is now underway as leading microfinance institutions transition into banks, a move that improves institutional resilience but risks weakening the sector’s inclusion mission if it crowds out lending to vulnerable rural borrowers who remain with non-transitioned, and increasingly higher-NPL, microfinance institutions.
4. Segment-Level Opportunities for 2026–2031
| Segment | Five-Year Opportunity |
| Payments and remittance infrastructure services | Cambodia’s strongest, most defensible advantage; opportunities in Bakong-integrated merchant services, cross-border remittance products, and QR-payment expansion into new regional corridors. |
| Digital lending and alternative credit scoring | Identified as a next-wave growth vertical; AI-enabled, data-driven credit scoring using Bakong and mobile transaction history could improve underwriting quality precisely where traditional microfinance underwriting has struggled. |
| Insurtech and micro-insurance | Named explicitly among the sector’s next adjacent growth verticals; low existing insurance penetration combined with high mobile reach creates a genuine greenfield opportunity. |
| Wealth management and digital investment platforms | Nascent but identified as an emerging vertical as Cambodia’s expanding middle-income population accumulates savings beyond basic deposit accounts. |
| Distressed-asset and NPL-resolution services | The new Asset Management Institution licensing framework creates a direct institutional opening for specialized NPL-servicing, workout, and distressed-debt investment entities. |
| Regulatory, compliance and risk-advisory services | Rising NPL levels, the microfinance-to-bank transition, and evolving NBC supervisory expectations all increase demand for compliance, credit-risk and governance advisory support for both banks and microfinance institutions. |
5. Practical Tips for Investors
For investors, financial institutions and the professional-services firms supporting them, five priorities stand out for the next five years.
First, build on Bakong rather than around it — any new payments, lending or insurance product should integrate directly with the national payment rail to access its reach, settlement speed and cross-border corridors rather than building parallel infrastructure.
Second, treat NPL-linked opportunities as a distinct investment thesis: the new Asset Management Institution licensing framework creates a genuine, regulator-sanctioned channel for distressed-asset investment that did not exist before 2026.
Third, underwrite conservatively and price in continued credit stress — an 8.9% system-wide NPL ratio and a still-adjusting microfinance sector mean that lending-linked ventures should stress-test portfolios against further deterioration, not assume the correction has bottomed.
Fourth, engage the NBC’s regulatory sandbox early for any genuinely novel fintech product, since it offers both a lower-risk testing pathway and a direct relationship with the primary supervisory authority.
Fifth, build compliance and credit-risk advisory capacity into any market-entry plan, given how directly the sector’s evolving supervisory framework — spanning NPL resolution, microfinance-to-bank transition rules, and ongoing financial-inclusion consumer-protection measures — will shape which institutions and products succeed.
Conclusion
Cambodia’s comparative advantage in financial services over the next five years is genuinely bifurcated. The investment opportunity for 2026–2031 lies in recognizing this split clearly: building new financial products on Cambodia’s genuinely advantaged payments layer, while approaching credit-linked and lending-based opportunities with the underwriting discipline that the sector’s own recent history makes clearly necessary. For better decision investor shall engage compliance and tax advisory support early to navigate QIP qualification.
Cam Accounting & Tax Service Co., Ltd., a member firm of Kreston Global, holding a GDT tax agent license, Accounting, Auditing, and liquidator licenses from ACAR, and accredited by the National Bank of Cambodia (NBC) and Trust Regulator (TR).
For more information, please contact our Accounting, Tax and Audit Expert
Ms. Haing Sivtieng, MIPA, MBA
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