The Cambodia’s FinTech Scene with Founder of the Debt Capital Raising Platform, Unkapt.

Geeks in Cambodia had the opportunity to catch up with Yanese Chellapen (YC), the founder of Unkapt, an innovative cross-border capital raising platform offering APAC SMEs the opportunity to raise debt capital from accredited investors, to get his views on the Cambodian FinTech landscape. Yanese, with a financing and investment background, also authored the access to finance study for Cambodian, Vietnamese and Nepalese startups.

With such experience and a well-rounded viewpoint of various FinTech scenes both within and outside of SEA, our interview with him left us with refreshing, new insights on the Cambodian FinTech scene that we just had to share with you.

What have you been up to since we last caught up when you were undertaking the access to finance report on behalf of the World Bank in Cambodia?

YC: The report has long been finalised and has provided an important roadmap for a broad audience (including for the individual startup ecosystem in the region).  Post this, we have worked on other related initiatives in South East Asia.

We have now taken a leaf out of that report and have set-up a private placement platform,, to improve the debt capital raising process for the small to lower middle market.  This is a newly launched initiative and we are in the process of validating the product/market fit in South East Asia.

Fintech has been a buzzword on the startup scene for a while and now it is gaining prominence in Cambodia.  What’s your take on fintech in Cambodia?

YC: It has to be noted that fintech has been part of the financial services industry architecture for a lot longer than what people allude to.  However, the narrative associated with fintech has materially changed over the last 3-5 years with a more vibrant fintech ecosystem, better tech, new business models, more collaboration, lower barriers to entry and faster product/service adoption.  Startups are now able to immerse themselves well and truly in the financial services industry at the expense of more established players.

From a Cambodian perspective, fintech represents tremendous opportunities for the startup ecosystem, the economy and the population at large.  The backdrops to substantiate the opportunities are: 1) the mobile and internet adoption rates in Cambodia (>100% and >50% respectively); 2) the demography of its population (circa 50% of the population is below 25); and 3) a virtually blank canvas to proceed with (both from a legacy system and regulatory perspectives).

How are these backdrops going to contribute to the development of fintech in Cambodia?

YC: These are some of the necessary ingredients needed to provide a solid foundation for the fintech ecosystem in Cambodia.  Not only mobile usage and internet usage are vital for the development of fintech but the actual adoption rates of mobile and internet can be used, to some extent, as a proxy to gauge the uptake of fintech offers.  The likelihood of adoption is sometimes overlooked in the tech space.  You may have the best tech, good penetration rate (which differs from adoption rate) and a conducive environment but if you cannot convert into a sustainable adoption rate then you are bound to hit saturation quicker than expected (or even failure for that matter).

With a young population, Cambodia is likely to have a comparatively better adoption rate because it may be easier to improve the financial literacy for a younger demographic, increase their awareness of digital financial products and benefit from their adaptability and flexibility to become a more engaged audience with digital financial offerings.

The blank canvas would allow progress to be made at a much quicker pace because there is a low level of impediment to deployment.  Given the nature of the Cambodian financial services industry, fintech is more of an enabling tool rather than a disruptive effect one.  Incumbents in the Cambodian financial services industry are (very likely to be) active participants in the fintech space because they will equally benefit by changing their business models, systems and processes, and adding new business lines.  One would expect the resistance to change from within these incumbents would be lower than their international peers.

What would be your recommendations for the fintech industry in Cambodia?

YC: Incumbent and incoming financial services industry participants should focus on the adoption aspect.  This is critical and will guide them in getting their product/service fit right.  Again, it is not a matter of coming up with the best of breed solution from day 1, which can be counterintuitive for adoption purposes at the user level.  It is a matter of coming up with an offer that has a low level of complexity, easy implementation, visible advantages for the users and does not create a big disconnect from past practices.  Once a captive, financial literate audience is acquired then more ‘sophisticated’ offers can be developed and deployed.  The Cambodian fintech sector should concentrate on the low hanging fruits/quick wins to create the right momentum.  This will send the right message to the industry and the broader audience (including investors).

In addition, the fintech ecosystem should not isolate itself from the rest of the Cambodian startup ecosystem.  The Cambodian startup ecosystem is still embryonic and it is to everyone’s benefit to keep building the Cambodian startup ecosystem as one building block rather than fragmenting the ecosystem.  The fragmentation works well where there is a (quite) mature startup ecosystem and an underlying substantial market but such is not the case for Cambodia in both instances.  At this stage, the fintech ecosystem should exist within the Cambodian startup ecosystem (and the broader tech theme) rather than seeking differentiation.

I would also say the Cambodian regulators (including NBC) should adopt a watching brief on the fintech sector and learn from the test cases in its own market before moving into adapting their regulations to the fintech sector (and for startups).  The local regulators should commit to the fintech agenda but should not follow suit to its regional and global counterparts by developing licensing and sandbox frameworks without fully immersing themselves in the practicalities of fintech players.  These frameworks, if designed poorly (as the case is for some that are currently live in different jurisdictions), can be ineffective and can stifle the proper development of the fintech sector.  It is best for the Cambodian regulators to adopt a pragmatic approach without being prescriptive at this stage…

My parting words are: At the risk of being repetitive, don’t forget adoption at the user level is a masterpiece of the puzzle.  Do not overlook such a critical aspect!

And that concludes our insightful interview with Yanese on the Kingdom’s FinTech scene. With a fast developing startup scene such as ours, an external viewpoint provides some food for thoughts for the local participants in our startup scene.

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