Chea Serey, Assistant Governor and Director General of National Bank of Cambodia (NBC), was in several thought leadership forums and speaking engagements to represent Cambodia, as well as the NBC, at Singapore FinTech Festival 2022. She shared her journey creating a credit bureau in Cambodia for three years during the time of crisis.
Her story began when she was tasked to establish Cambodia's first credit bureau, a centralized credit information sharing database.
For the first time, Cambodia was represented at the FinTech Festival, from November 2 to 4. The event brought together 850 expert speakers and 250 hours of content.
Cambodia was represented through CamTech Summit Powered by Prudential as one of the Country Pavilions, with its title sponsor Prudential Cambodia and the NBC as their festival co‑exhibitors.
What is Credit Bureau Cambodia?
Credit Bureau Cambodia (CBC) is the leading provider of financial information, analytical solutions, and credit reporting services to financial institutions and consumers in the Kingdom of Cambodia.
With strong support from NBC, the Association of Banks in Cambodia (ABC), Cambodia Microfinance Association (CMA), and the International Finance Corporation (IFC), a world-class private credit bureau was initiated in response to the demands of Cambodia’s financial sectors to run a fair, transparent, and well-managed credit market to support the country’s economic growth.
A Credit Bureau Working Committee was formed to initiate the formation of the credit bureau. Subsequently, the request for proposal (RFP) was issued and the selection of a vendor partnership was finalized in 2010. The prakas on Credit Reporting was passed in May 2011 and Credit Bureau Cambodia (CBC) was officially launched on March 19, 2012.
“People used to call the bureau my baby, and I would reply that it was the longest pregnancy I've ever had. I carried this baby for three years, and I was determined to deliver it,” Serey said with a smile.
In 2006, with a grant from a multilateral organization, the NBC established and ran a negative credit information sharing system. However, the system was barely used, even by those who volunteered, and was found with bugs.
“I requested another multilateral organization to come and have an independent assessment of our system, and they came with a result that was very bad. The system was irreparable, so NBC didn’t have the technical expertise and resources to maintain the system and even less to make it financially sustainable and scalable,” she said.
She added, “To be fair to us, running a credit bureau required a niche expertise and we just didn’t have it.”
Later on, she told her boss that a new bureau to use privately was necessary. So, her boss asked her to be in the first line of defense and lead the credit bureau establishment initiative. This marked the start of her three-year journey creating a new credit bureau in the country.
The first step she has to deal with was two multilateral organizations. But problems ensued.
“I was trapped in the middle and I had to arbitrate the power struggle between two giants. So, I needed help. I took the opportunity to speak to the then newly elected chairman of the Bank Association. He was very keen to leave a legacy on his chairmanship and I asked him to announce that the Private Sector Association wanted a newly and privately run credit bureau,” she said.
By relegating the Private Credit Bureau initiative to the Banker Association, it helped save her from having to choose sides.
“I was young, under pressure, and I remember walking from some of those meetings, broken and crying, but I needed to get this baby out. The next 15 months, I lived and breathed the credit bureau,” she said.
First, she and her team had to lay the regulatory framework for the licensing and functioning of the credit bureau – all without any prior knowledge. She told herself that she had to trust her own gut instincts and the research she had done.
Serey continued that checking and uploading credit information is compulsory, whether it is negative and positive information. These are critical points that lead to success.
Next, she was elected to become Chairwoman of the company.
The fact that Cambodia shared the same shareholders with Credit Bureau Singapore, one of the best in the world, contributed greatly in the transfer of knowledge, she said.
“I learned that bankers weren’t the kind who would pay on time, although they were very good at enforcing it on their customers. They raised many excuses in brief, they just wanted it for free and to those who dragged their feet and offered to have an onsite inspection by the NBC quickly resolved the problem,” she said.
When the credit bureau is set up incorporated, it is required to work on the product development and the pricing.
She added that the bureau needed to be sustainable financially and continue to innovate and should not abuse its monopoly in the market. The pricing should be fair, a consumer credit report was initially set at $3. The microfinance sector raised concern over such pricing on their small ticket-sized customers and suggested that banks should subsidize Money Flow Index (MFI), which provides lending to the poor segment of the market that banks did not want to go to.
Two years later, in 2012, Credit Bureau Cambodia went live and Cambodia’s first bureau was finally born.
“The rapid adoption rate was not seen anywhere in the world. We became a success story of a privately-run credit bureau for developing countries and hosted many regulators and bureau operators around the world to share our experience in 2017,” she said.
In 2012, Cambodia’s ease of access to finance moved to number seven worldwide from 98. This year, CBC is celebrating its 10th anniversary and continues to thrive.
What did she learn through the journey?
“One, know when to admit your failures and ask for help. It is not common for a regulator to admit their failures. The market will judge us negatively, but please know that we are humans and we all make mistakes,” she said.
“Two, empowering your subordinates is the best way to teach them, to get them to do the right work responsibly.”
She is so thankful to her former boss, who was open to the opportunity to allow her to lead such a large-scale project. She also believes that younger generations are not just after money, but want recognition in doing meaningful work that has a positive impact on the society.
She added, “Three, there should be give and take. Incentives should be provided when good is done, and punishment also be given when it is bad. By creating good, disciplined and predictable outcomes, we are creating this credibility by the regulators.”
She admitted that getting banks and microfinance institutes together to agree on a common credit bureau is not easy. As there are few countries in the world that have achieved this, building trust and credibility was critical.
“Four, I am proud to be a woman and to be a women leader. I don’t think men would have found a way to solve the frozen and live fish dilemma, at least not readily. A woman's instinct follows me around and despite critics,” she said.
“Five, I learned that bankers weren’t the kind who would pay on time, but they are good at enforcing it on their customers.”