Cambodia-S’pore FTC to minimise risks of SME trade – Khmer Times

The Financial Transparency Corridor (FTC) Project

The Financial Transparency Corridor (FTC) project, jointly initiated by the National Bank of Cambodia (NBC) and the Monetary Authority of Singapore (MAS) through a Memorandum of Understanding (MoU), aims to minimize risks of bilateral cross-border small- and medium-sized trading and financing.

MoU Signed to Develop FTC

A source in Singapore, who has inside information on the MoU but declined to be identified, revealed that the MoU was signed last week in Phnom Penh by NBC and MAS. The purpose of the MoU is to develop the FTC as a digital platform for infrastructure that facilitates the sharing and exchanging of information between Small and Medium Enterprises (SMEs) and their counterpart financial institutions in Cambodia and Singapore. This platform will be used to assess and manage risks.

The FTC envisions that Cambodian SME sellers can collaborate with their participating Cambodian financial institutions to share trusted information with their Singapore counterparts. However, further details regarding this matter should be obtained from NBC, which is better positioned to provide additional insights.

Enhancing Information Exchange and Risk Management

The FTC aims to broaden the information set used by financial institutions to assess financing risk and improve risk management procedures. By facilitating greater information exchange between SMEs and their counterpart financial institutions, the FTC has the potential to increase trade and financial services support for SMEs from Singapore and Cambodia. This will lead to improved recognition and trust.

About MAS and NBC

MAS is Singapore’s central bank and integrated financial regulator. It promotes sustained, non-inflationary economic growth through monetary policy and macroeconomic surveillance. Additionally, MAS manages exchange rates, official foreign reserves, and liquidity in the banking sector.

NBC is Cambodia’s central bank and monetary and supervisory authority. Its mission is to determine and direct monetary policy to maintain price stability and facilitate economic development within the framework of the country’s economic and financial policy.

Utilizing the FTC for Financing Support

According to the press release issued by NBC, Singapore financial institutions will be able to utilize the FTC to acquire trusted information from Cambodian financial institutions. This information will be used to assess financing support for cross-border business between Singaporean SME buyers and Cambodian SME sellers. Similarly, Cambodian financial institutions supporting Cambodian sellers can obtain trusted information on Singaporean buyers through the FTC.

Accessing Broader Digital Trade Networks

Enhanced information flows enabled by the FTC will allow SMEs from Cambodia and Singapore to access broader digital trade networks, such as Business Sans Border Proxtera. This digital platform aims to facilitate cross-border trade connectivity among emerging market SMEs in ASEAN and other regions.

However, access to information on the digital platform requires formal consent from the counterparty being assessed by the financial institution. The MoU does not specify its validity period, as the FTC will be established and used as an ongoing platform for accessing information.

Supporting Economic Growth and Mitigating Risks

Chea Serey, Deputy Governor of NBC, stated that the FTC is another platform for cross-border information sharing between Singapore and Cambodia. This collaboration follows their previous joint effort in March of this year to share individual consumer credit profiles. The goal is to make it easier for citizens of both countries to access financial services in their country of residence.

Serey emphasized that SMEs are the backbones of both economies and their ability to access financing beyond borders will greatly contribute to economic growth. The FTC will also establish anti-money laundering rules to mitigate risks and potential trade disputes.

Sopnendu Mohanty, Chief FinTech Officer of MAS, expressed that the FTC is MAS’s first engagement in Asia. He believes that this collaboration will lead to closer partnerships between financial centers, resulting in better products, innovative solutions, and stronger economic growth in the global digital economy. Additionally, the FTC will support open trade flow for businesses, particularly SMEs, by enhancing financial trust data for financial services between Singapore and Cambodia.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 17: Partnerships for the Goals

The article discusses the Financial Transparency Corridor (FTC) project, which aims to facilitate information sharing and risk management between small and medium-sized enterprises (SMEs) and their financial institutions in Cambodia and Singapore. This aligns with SDG 8, which focuses on promoting sustained economic growth, full and productive employment, and decent work for all. It also relates to SDG 9, which emphasizes the importance of building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation. Additionally, the project involves a partnership between the National Bank of Cambodia (NBC) and the Monetary Authority of Singapore (MAS), highlighting the relevance of SDG 17, which emphasizes the importance of partnerships for achieving the SDGs.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation.
• Target 9.3: Increase the access of small-scale industrial and other enterprises to financial services.
• Target 17.16: Enhance the global partnership for sustainable development.

The article highlights the goal of the FTC project to facilitate greater information exchange between SMEs and their financial institutions, which aligns with Target 8.3 of promoting development-oriented policies that support entrepreneurship, creativity, and innovation. The project also aims to improve access to financial services for SMEs, which is in line with Target 9.3. Additionally, the partnership between NBC and MAS demonstrates the commitment to enhancing global partnerships for sustainable development, as stated in Target 17.16.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 8.3.1: Proportion of informal employment in non-agriculture employment.
• Indicator 9.3.2: Proportion of small-scale industries with a loan or line of credit.
• Indicator 17.16.1: Number of countries reporting progress in multi-stakeholder development effectiveness monitoring frameworks.

The article does not explicitly mention specific indicators, but based on the identified targets, the following indicators can be used to measure progress:

– Indicator 8.3.1 can be used to assess the proportion of informal employment in non-agriculture sectors, indicating the extent to which productive activities and decent job creation are being promoted.

– Indicator 9.3.2 can measure the proportion of small-scale industries that have access to loans or lines of credit, reflecting the improvement in their access to financial services.

– Indicator 17.16.1 can track the number of countries reporting progress in multi-stakeholder development effectiveness monitoring frameworks, indicating the level of engagement and collaboration in partnerships for sustainable development.

4. Table: SDGs, Targets, and Indicators

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Source: khmertimeskh.com

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