Study shows fintech could increase GDP by about 6%

Adopting digital financial services, or fintech, could increase the Kingdom’s GDP by about 6%, according to Accelerating Financial Inclusion in Southeast Asia with Digital Finance, a report commissioned by the Asian Development Bank (ADB). Fintech has the potential to generate more than $1.7bn in additional electronic payment flows, fuel more than $2.5bn in additional credit uptake, and mobilize more than $500mn in savings, they said. According to the report, Cambodia’s formal financial institutions only met 16% of the populations’ needs for saving activities, the lowest among four ASEAN countries—Myanmar, Cambodia, Indonesia, and the Philippines. However, Cambodia scored the highest in terms of having the most developed network of microfinance institutions. The report said digital enablement could be a powerful lever to not only address the unmet needs of the population, but also to reduce the reliance on high-cost agent networks and on branch and ATM infrastructure that has discouraged MFIs from mobilizing deposits from their rural borrowers. Chris McCarthy, CEO of Mango Tango and co-chair of the Cambodia eBusiness Working Group, said banks and financial institutions were investing heavily into digital financial services, and the only thing that they need to do is to convince the majority of people to use the services. (Source: Phnom Penh Post)