Bank makes it big by keeping things small

[PHNOM PENH POST]

ACLEDA chief executive In Channy

WITH 234 branches and 7,000 employees throughout the country, nothing in Cambodia comes bigger than ACLEDA Bank. “We are number one in loans and deposits, branches and offices, and employees too,” In Channy, the bank’s president and chief executive, says.

Speaking in his office overlooking Monivong Boulevard, In Channy says that despite its success, the bank hasn’t lost track of its origins as an NGO making micro-loans to small rural communities. Many of its customers have stayed with ACLEDA since those days.

“When we were an NGO, they were the customers of an NGO. And now that we are a bank, they are the customers of a bank,” In Channy says.

“We speak the language of the local people.”

In an interesting twist on Robin Hood, the bank uses money invested by businesses in the capital to fund peasant entrepreneurs in the countryside.

During the first quarter of this year, 70 per cent of the $1 billion in funds deposited with ACLEDA were from Phnom Penh. A similar proportion was outlaid to the bank’s rural customers in the form of loans.

“We mobilise the surplus funds from urban to rural areas,” In Channy says. “Both urban and rural branches need each other.”

This is all part of ACLEDA’s mission to provide the means for entrepreneurs in small, medium-sized and micro-enterprises to manage their financial resources effectively,  In Channy says.

ACLEDA’s success is partly due to its high visibility in poor rural communities. It has 60 per cent of the bank offices and branches in  Cambodia, according to its president.

“We are close to the customer,” he says. “We need to be in their communities so they can see us every day.”

ACLEDA’s image as the bank of the poor, not the rich, is another important factor. Customers can take out loans for as little as $50 and open an account with just $10.

“We have opened the door for lower-income people,” In Channy says.

In its constant efforts to improve services for customers, ACLEDA is working on electronic and mobile-phone banking.

“It’s like a bank in the customer’s pocket,” In Channy says of the latter.

Customers can transfer funds via their mobile phones – something that is especially useful for those who live far from their nearest branch.

Over the past three years, ACLEDA has expanded beyond the Kingdom’s borders into neighboring Laos, opening 15 branches there. This step is part of its plan for further expansion within the region, including China.

“Before we move to China, we need to expand through the whole of Laos first,” In Channy says.

“We need to have at least 100 branches in Laos. Then we can go to other countries such as China and Myanmar.”

Despite its initial losses, In Channy maintains that the Laos operation is on track.

When ACLEDA entered the country in July, 2008, the plan was to achieve profitability within three years.

That target was achieved in April this year, three months ahead of schedule.

“The banks have done very well,” In Channy says, adding that there is a gap in the Laos market for banks that work in the lower sectors of the economy. “The market is huge,” he says.