The Monetary Authority of Singapore (MAS) and the National Bank of Cambodia (NBC) have signed a memorandum of understanding (MOU) to facilitate trade and cross-border related financial services between small and medium-sized enterprises (SMEs) in both countries.
Named the financial transparency corridor (FTC) initiative, the MOU was signed on July 11.
Under the initiative, the corridor aims 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. In addition, it will also 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.
For example, under the FTC, a Singapore financial institution can use the corridor to acquire “trusted information” from a Cambodian financial institution when it comes to assessing financial support for a Singaporean SME that works with a Cambodian SME.
At the same time, a Cambodian financial institution supporting a Cambodian seller may also 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,” say both central banks in a July 11 statement.
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“We are excited to partner with NBC to create the FTC, a first for our engagements in Asia. The FTC will support open trade flows for businesses, in particular SMEs, through enhancing financial trust data for financial services between Singapore and Cambodia. This will lead to closer partnerships between our financial centres for better products and innovative solutions, and stronger growth together for our economies in the global digital economy,” says Sopnendu Mohanty, chief fintech officer at MAS.
“In March, Singapore and Cambodia collaborated on cross-border sharing of individual consumer credit profiles that make it easier for citizens from both countries to access financial services in their country of residence. We are also excited to take part in the creation of the FTC, which 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,” adds Dr Serey Chea, deputy governor of the NBC.
