Securing a loan can be a life-changing event, acting as a vital catalyst that allows individuals and families to access the capital necessary to start a business, buy a home, and invest in their future. For many, formal credit opens doors to economic stability and upward mobility. However, for Cambodia’s large underbanked and unbanked population, a persistent difficulty in accessing financial services—coupled with an absence of the traditional financial data typically used to assess creditworthiness—can make obtaining a loan profoundly challenging.
According to data compiled by the National Bank of Cambodia (NBC), only 59 percent of the adult population currently has access to formal financial services. This leaves a striking 41 percent of citizens either relying on informal financial services or operating entirely outside the formal financial ecosystem. Without formal credit histories, bank accounts, or traditional collateral, these individuals often find themselves locked out of the mainstream economy, unable to secure the funding needed to grow micro-enterprises or manage household emergencies.
Despite these hurdles, recent developments in Cambodia’s rapidly evolving lending landscape offer significant cause for optimism. The explosive growth of the country’s fintech ecosystem, paired with the mounting potential of alternative-data credit frameworks, could provide a sustainable path toward financial inclusion for those who have previously been left out of the conversation entirely.
Unlocking Potential Through Non-Traditional Metrics
Traditional financial institutions have long relied on standard parameters—such as historical debt repayment records, bank statements, and formal credit files—to determine the creditworthiness of potential borrowers. However, driven by rapid digitalization and advancements in technologies like data analytics and machine learning, alternative credit scoring is beginning to shift these paradigms.
Alternative credit scoring is built upon any form of non-traditional information that can offer valuable insights into a borrower’s genuine ability and propensity to repay loans. Under these emerging frameworks, telecom and utility payment histories, digital footprints, mobile data, and e-commerce transactions can all be systematically utilized to assess an individual’s or a business’s financial reliability.
Ms. Phal-Chalm Theany, Secretary General of the Association of Banks in Cambodia, emphasizes the transformative power of these new metrics. "Alternative data has tremendous potential for contributing to financial inclusion by complementing traditional financial data that banks have," she notes. "They range from information on mobile wallet transactions to information on user behavior on digital platforms that can be utilized for risk assessment of individuals and MSMEs."
Banks across Cambodia are increasingly looking to tap into these alternative data streams to better serve the unbanked and underbanked segments of the population. Mr. Mach Chan, CEO of Phillip Bank in Cambodia, points out that the country’s data landscape remains heavily fragmented, with information siloed across multiple organizations and institutions.
"Many people do not have formal loans from financial institutions. This makes it challenging to predict their repayment capacities," Mr. Chan explains. "If Phillip Bank can easily assess aggregated alternative data, we can better assess a borrower’s creditworthiness based on their social and behavioral indicators, and spending patterns and habits. This allows us to form a more complete picture of the borrower’s risk profile, with opportunities to offer cheaper loans to less risky customers, regardless of whether they are banked."
Mr. Chan also highlights the persistent hurdle of informal business structures, noting that many small and medium enterprises are not formally registered, which complicates the traditional lending process. "If banks can access the payments data of these MSMEs, the financial industry will be more confident to support the needs of these businesses," he adds.
Regional Momentum and the Rise of Alternative Data Frameworks
Across Southeast Asia, governments, commercial banks, and key industry stakeholders are becoming increasingly interested in the potential of alternative data as a powerful tool to expand the scope and accessibility of financial services. This regional push is backed by comprehensive research from major international institutions.
A Southeast Asia-focused report published by the World Bank Group highlights four emerging data types within the digital ecosystem that can significantly aid credit decision-making: mobile operator and app-based data, digital payments, e-commerce data, and enterprise-tech business-performance data. Similarly, the Asian Development Bank has repeatedly highlighted alternative data as one of the critical drivers for advancing financial inclusion across the region.
Neighboring countries are already taking concrete steps to build the necessary infrastructure. In December 2022, the National Credit Bureau of Thailand announced plans to launch a dedicated non-credit data centre by consolidating alternative data into its existing credit database, starting with utility payment data from electricity and water providers. In Indonesia, credit reporting agency Experian collaborated with a major telecommunications company to utilize real-time telco data to improve financial inclusion for underserved populations while reducing risk for lenders. Meanwhile, in the Philippines, the Credit Information Centre has been working on open policies to enable accessing entities to combine traditional credit bureau data with alternative data sources, aiming to create a comprehensive profile of a borrower’s creditworthiness.
In Cambodia, utility bill payments and telecommunication records serve as vital repositories of alternative credit data. Furthermore, with the rapid pace of digitalization and the widespread adoption of digital payments, the country possesses enormous potential to tap into an extensive array of alternative data points derived from daily digital footprints. Globally, these exact categories of data have served as the foundational drivers for digital financial inclusion.
Given the current surge in digital financial service providers, payment catalysts, and e-commerce platforms within Cambodia, massive amounts of alternative data are generated daily. Consequently, experts emphasize the critical need for an organized, secure ecosystem capable of collecting, processing, and utilizing this alternative credit information effectively.
Regulatory Adaptations and the Pivotal Role of Credit Bureau Cambodia
Recognizing the shifting tides of the financial sector, the regulatory environment in Cambodia has adapted proactively. In 2020, the National Bank of Cambodia revised its prakas on credit reporting. This crucial regulatory update enabled Credit Bureau Cambodia (CBC) to officially collect alternative data alongside traditional credit data, empowering financial institutions to significantly strengthen their credit risk assessment capabilities.
Established in 2012 with the active support of the National Bank of Cambodia, the Association of Banks in Cambodia, and other key sector stakeholders, CBC was created to manage a fair and transparent credit market that supports national economic development. Over the past decade, CBC has evolved into the leading provider of financial information in the country.
Although the bureau currently manages traditional data reported directly by its member banks and financial institutions, it is actively preparing an ambitious roadmap to collaborate with multiple sectors throughout the country. The ultimate goal is to establish a comprehensive alternative credit data ecosystem that operates seamlessly alongside the traditional framework to deliver tangible social and economic benefits to all Cambodians.
Gordon Peters, co-founder and CEO of fintech firm Boost—a company that harnesses popular social media platforms like Facebook and Telegram to expand access to finance—believes Cambodia holds a distinct advantage. "I would say Cambodia stands a decade ahead of other emerging market economies because of the Credit Bureau and the lending environment," Peters explains. "CBC has done a great job of collecting, collating, and sharing data on the financial lives of customers. I think that is a huge unlock."
For fintech innovators like Peters, CBC provides a foundational level of legitimacy and security that has greatly strengthened Cambodia’s financial sector while allowing private firms to fill crucial gaps in the ecosystem. With banks and financial institutions placing a high degree of trust in CBC’s data infrastructure, expanding its capabilities to manage an alternative data reporting system appears entirely practical. Having already managed the credit history data of more than 7 million individuals and businesses, the bureau is uniquely situated to scale its operations.
Ms. Theany of the Association of Banks in Cambodia elaborates on this strategic position. "CBC is a data centre for the financial sector that collects data from banks and financial institutions, stores and analyses them for the purposes of credit scoring for those financial institutions," she states. "Where each bank and financial institution may have its own data, CBC has the financial information for the whole sector."
"With strong capabilities in data analytics, artificial intelligence, and machine learning, CBC is uniquely positioned to harness alternative data from diverse data sources to enable banks and financial institutions to conduct better assessment of the profile of the unbanked—mainly women and farmers—and informal small businesses, and estimate income with more precision," Ms. Theany adds. "This shall enable financial institutions to offer more appropriate credits or other financial services in the absence of a financial footprint, credit histories, or property guarantees."
Echoing this sentiment, Mr. Chan of Phillip Bank suggests that CBC could spearhead the aggregation of payments, telecommunications, and utility data. "These datasets are then fed into a prospective customer’s credit score," he says. "Over the past few years, with NBC’s Bakong as a key enabler, we’ve seen a rapid digitization of payments. We believe that when assessing customer creditworthiness, payments data is just as important as borrowing and repayment data, and should be prioritized."
Mr. Chan also notes that integrating data from the General Department of Taxation (GDT) could serve as a valuable asset for assessing small and medium-sized enterprises, allowing banks to extend clean loans with greater confidence and stimulate broader economic activity.
The Evolution of Algorithmic Credit Scoring
At present, CBC provides the K-Score, an algorithmic credit score (ACS) that utilizes advanced machine learning algorithms to analyze massive datasets and generate reliable credit scores in the absence of traditional financial documentation. First launched in 2015 and subjected to a major algorithmic overhaul in 2020 to match evolving market conditions, the K-Score is currently available to all CBC member financial institutions as well as directly to individuals via a dedicated mobile application.
A 2023 study published in the Asian Journal of Law and Science underscores the broader significance of these tools, noting that algorithmic credit scoring acts as "the tip of the spear of the global campaign for financial inclusion, which aims at including unbanked and underbanked citizens in financial markets and delivering them financial services, including credit, at fair and affordable prices." The research outlines the wide-ranging benefits of alternative data as a mechanism to uplift individuals across Southeast Asia who traditionally lack access to formal financial networks.
In Cambodia, CBC continues to lead the charge by leveraging artificial intelligence and machine learning tools to process vast amounts of digital data at an unprecedented scale. By regularly refining its risk analysis profiles and loan portfolios through alternative metrics, the bureau maintains its standing as the foremost institution managing and analyzing financial data in the country.
Oeur Sothearoath, CEO of Credit Bureau Cambodia, emphasizes the organization’s forward-looking vision as it enters its second decade of operation. "As we are entering our second decade of credit reporting in Cambodia, CBC is committed to being a trusted element in the national financial infrastructure for providing alternative credit data, to strengthen credit risk assessment for our 190-plus member financial institutions, and to expand access to credit for the new-to-credit consumer segments," he explains. "We are very open to collaborate with alternative data providers such as telcos, utilities, and payment service providers to harness information not found in traditional credit reports, to help more Cambodians obtain access to mainstream financial services."
As CBC builds upon its established presence within the financial sector, a growing community of technology innovators and financial institutions continues to collaborate closely with the agency, paving the way for a more inclusive and resilient financial ecosystem in Cambodia.
