Cambodia and Singapore have launched a Financial Transparency Corridor (FTC) initiative intended to provide the necessary digital infrastructure for cross-border financial services and trade between small- and medium-sized enterprises (SME) in either country.
The National Bank of Cambodia (NBC) and the Monetary Authority of Singapore (MAS) have entered into a memorandum of understanding (MoU) on the initiative, according to a July 11 joint statement issued by the two central banks.
“Under the FTC, a Singapore financial institution, in assessing financing support for a Singapore SME buyer’s cross-border business with a Cambodian SME seller, can utilise the FTC to acquire trusted information from a Cambodian financial institution on the Cambodian SME seller.
“Similarly, a Cambodian financial institution supporting a Cambodian seller can obtain trusted information on the Singapore buyer through the FTC.
“Through such enhanced information flows, this can help SMEs in Singapore and Cambodia access broader digital trade networks such as the Business Sans Border Proxtera global network, and provide SMEs with greater trade connectivity within ASEAN and other growth regions,” it said.
MAS chief fintech officer Sopnendu Mohanty described the partnership as “a first for our engagements in Asia”.
This collaboration, he said, “will support open trade flows for businesses, in particular SMEs, through enhancing financial trust data for financial services … [leading to] better products and innovative solutions, and stronger growth together for our economies in the global digital economy”, according to the statement.
NBC deputy governor Chea Serey said in the statement: “In March, Singapore and Cambodia collaborated on cross-border sharing of individual consumer credit profiles that makes it easier for citizens from both countries to access financial services in their country of residence.
“[The FTC] will further extend the two countries’ cross-border information sharing to businesses and SMEs. SMEs are the backbones of the Cambodian and Singaporean economies and their abilities to access financing beyond the border will greatly help them grow their operations and better contribute to both countries’ economic growth,” she added.
The statement said the “supporting digital infrastructures under the FTC initiative” are to “establish a consent-based digital infrastructure to facilitate information exchange between participating financial institutions in Singapore and Cambodia, to support the provision of cross-border financial services to SMEs”.
They also aim to “support financial institutions’ loan assessments for trade financing and an SME’s compliance with anti-money laundering rules to mitigate risks and potential trade disputes”, it said.