The Covid-19 pandemic, which led to weak export markets and hit living standards, did not stop Canadia Bank from maintaining the strongest balance sheet in the nation for a third consecutive year.
In the 12 months to September 2021, total assets rose 2.7% to $7.3 billion as Canadia tended to its 500,000-plus customers, with a 17.7% share of all commercial bank deposits. It’s quite a feat considering how competitive and overcrowded Cambodia’s banking scene has become, with more than 50 names competing for customers in a population that is half the size of Malaysia’s.
The real focus in the last 20 months has been micro, small and medium- sized enterprises – a sector directly on the frontlines of pandemic fallout.
Canadia, now in its 30th year, has some experience of dealing with crises. Back in 1997, for example, the bank’s headquarters were literally caught in the crossﬁre of factional ﬁghting in downtown Phnom Penh. While most banks ceased operations, Canadia stayed open, allowing customers access to their accounts and honoring cheques, which helped to keep the physical economy going. A similar pattern played out during local market panics in 2003 and 2008. And then, of course, it all came to a head in 2020 when the ﬁrst waves of Covid-19 upended an economy not known for a state-of-the-art public health system.
Canadia’s business continuity team sprang into action. While branches remained open, the ﬁrm raised its already highly competitive digital banking game. Much of the new digital functionality has been aimed at helping SMEs thrive in unprecedented times.
In June 2021, Canadia, led by chief executive Raymond Sia, joined forces with state-owned Credit Guarantee Corporation of Cambodia to support the latest government business recovery eﬀorts. This provides working capital to assist cash-stressed micro, small and medium enterprises, or MSMEs, as well as larger companies.
Such business recovery schemes act as collateral or security for 70% to 80% of the total amount of borrowing by businesses from participating ﬁnancial institutions. The upshot is that MSMEs and larger ﬁrms have greater access to loans, working capital, and a range of investments for business expansion.
Sia’s driving philosophy – a key reason Canadia wins the Asiamoney award for best bank for SMEs – is that smaller companies are the key to Cambodia transitioning from a centrally planned economy to a free-market system that generates new waves of innovative startups to disrupt local business culture.
In particular, Canadia is supporting the growth of SMEs in the agriculture sector by sponsoring young entrepreneur associations. The bank, for example, is a big supporter of the Cambodian Women Entrepreneur Association. It’s a business model that is ripe for further success.