Cambodia's Financial Environment

1.    Cambodia’s public debt stands at $11.24 billion
Cambodia's public debt has reached $11.24 billion, as indicated by the Economic and Finance Ministry's recent release of Cambodia's Public Debt Statistical Bulletin. As of the end of last year, the country's public debt was reported at $11.24 billion, with the debt risk at a relatively low level. The announcement states that 46% of the public debt is denominated in US dollars, Special Drawing Rights (SDR) account for 19%, Chinese yuan accounts for 11%, Japanese yen accounts for 11%, euros account for 7%, and domestic/other currencies account for 6%. According to the report, 99.5% (equivalent to $111.9 billion) of this debt is external public debt, while the rest is domestic public debt. The bulletin mentions that 64% of the public debt comes from bilateral development partners' loans, and 36% comes from multilateral development partners. Domestic public debt accounts for 0.5%. According to the Ministry's budget bill for 2024, the government plans to issue sovereign bonds worth 440 billion riels (approximately $108 million) by 2024, which will be used to provide direct revenue and ensure the sustainability of investment efficiency and debt management.
The announcement indicates that government securities totaled 238 billion riels in 2023, equivalent to $58.26 million. According to the Ministry's budget bill for 2024, the government will issue sovereign bonds worth 440 billion riels (approximately $108 million) in 2024, aimed at providing direct revenue and ensuring the sustainability of investment efficiency and debt management.
According to the Ministry of Economy and Finance of Cambodia's expectations, Cambodia's Gross Domestic Product (GDP) may reach $35 billion (143 trillion riels) this year (2024). Adding an additional $108 million in debt this year would bring the total to $11.348 billion, approximately 32.4% of the total GDP in 2024. Compared to debt ratios in other countries, this figure is not considered high, indicating limited national debt risk. Increasing debt for infrastructure development to foster economic growth is a common policy for governments, as long as it remains within reasonable bounds and contributes to economic growth.

2.    Cambodians increase savings in deposit-taking microfinance players
Cambodians appear to be increasing their savings in deposit-taking microfinance institutions (MFIs). In 2023, the deposit balance of four deposit-taking MFIs (AMK Plc, Amret Plc, LOLC (Cambodia) Plc, Mohanokor Plc) amounted to $2.22 billion. According to data from the Cambodia Microfinance Association (CMA), this represents an 11% increase compared to the deposit balance of $2 billion in 2022. MFIs have tried to make onboarding and payments easier by leveraging the government’s initiatives such as Bakong and CamDigiKey. "We have implemented new measures in the digital banking sector. Now, our customers can make QR code payments, interbank transfers, and use other digital services through mobile applications."
However, the number of depositors placing deposits in MFIs has not significantly increased compared to the same period last year. In 2023, the number of depositors increased by only 1%, from 1.98 million in 2022 to 2 million. The fact that the deposit balance increased by 11% while the number of depositors increased by only 1% indicates this trend. This suggests that existing customers are increasing their savings/deposits with MFIs, indicating a trend of increased income for most MFIs' clients. According to CMA data, the average deposit value in MFIs is expected to increase by 10% from $1,009 in 2022 to $1,106 in 2023. The trend of increasing income and deposits reflects Cambodia's per capita income continuing to grow as anticipated by the government, contributing substantially to the GDP growth reaching the hands of the general populace.