Cambodia and Singapore Launch FTC to Boost SME Trade

In a big boost to the SME trade between Singapore and Cambodia, the Monetary Authority of Singapore (MAS) and the National Bank of Cambodia (NBC) have launched Financial Transparency Corridor (FTC) initiative between the two Southeast nations.

The launch coincided with the two-day official visit of Prime Minister Hun Manet to Singapore on 18 and 19 June 2024. This announcement was made in Singapore, which was presided over by Prime Ministers of Cambodia and Singapore Samdech Moha Borvor Thipadei Hun Manet Lawrence Wong respectively.

The FTC is a consent-based digital infrastructure designed to facilitate the sharing of SME financial data between financial institutions (FIs) in Cambodia and Singapore. This initiative aims to bolster trade and cross-border financial services for SMEs by enabling better credit risk assessments and enhancing the availability of financing.

The platform, designed and run by Proxtera Pte Ltd, will significantly improve data accessibility, making it easier for FIs to assess creditworthiness and provide financing solutions tailored to the needs of SMEs.

NBC Governor Dr Chea Serey said that this initiative was important for the economic relationship between the two countries.

“The FTC exemplifies the shared vision of the NBC and MAS to support information flows for businesses, particularly SMEs, through enhancing financial trust data for financial services between Singapore and Cambodia. This will promote better access to finance beyond borders,” Dr Serey said.

Emphasizing the strategic benefits of the FTC, MAS Managing Director Chia Der Jiun said that the start of the FTC, with an initial set of financial institutions from both countries will support greater access to financial services for SMEs through the exchange of SME financial data on the FTC digital infrastructure. This will create greater business opportunities for our SMEs and participating financial institutions, he said.

First Transactions and Future Plans

The first batch of institutions involved includes ANEXT Bank Pte Ltd, Liquid Group Pte Ltd, and Sing Investments & Finance Limited from Singapore, along with Advanced Bank of Asia Ltd, ACLEDA Bank PLC, Phillip Bank PLC, Sathapana Bank PLC, and Wing Bank PLC from Cambodia. These institutions have already begun utilising the FTC platform for initial transactions.

The FTC has facilitated its first transactions. In Singapore, Sing Investments & Finance Limited will use the FTC to finance JR Group, a leading food services SME, in purchasing raw materials from a Cambodian SME.

Liquid Group Pte Ltd will assist with foreign currency payments related to this trade. In Cambodia, Sathapana Bank PLC will leverage the FTC to provide financing to Comin Khmere Company Ltd, an importer of building materials from multiple Singapore SMEs.

Dr Serey expressed optimism about the FTC’s impact on SME financing and said that the start of the FTC underscored their commitment to driving positive change, fostering trade and financial services, and promoting sustainable economic development.

Financial Transparency and Cooperation

The FTC is expected to expand in subsequent phases, increasing the number of participating financial institutions and exploring new areas such as green finance and trade finance. MAS and NBC have also signed a Memorandum of Understanding (MoU) in July 2023 to collaborate on this initiative. This MoU solidifies the commitment of both countries to work together in enhancing financial transparency and cooperation.

As the FTC evolves, it aims to provide SMEs in both countries with greater access to financial services, thereby promoting trade and economic collaboration. This initiative marks a significant step towards a more interconnected and transparent financial landscape in the region.

The ease of data accessibility will enable participating financial institutions to make better credit risk assessments and facilitate greater availability of financing for SME trade between Singapore and Cambodia.