Digital Only Financing Solutions with Add-on Services

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Digital Only Financing Solutions with Add-on Services
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Financials
Corporate and Retail Banking
Business Model Description

Facilitate creation of digital solutions and services that provide access to loans, accounting, billing and payments, especially for the underserved segments of the population. Examples of companies active in this space are:

Boost Capital (Cambodia) Co., Ltd. (Boost), founded in 2018, provides digital microloans through smartphones to small businesses and entrepreneurs, including collateralized and uncollateralized loans ranging from USD 100 to USD 10,000 (14) at an interest rate of 1.4% per month.(3) Its technology interviews customers through a chatbot, credit scores them, and offers loans digitally.

As of 2022, Boost disbursed USD 1.6 mn in loans, and ~80% have been uncollateralized. (15) It also provides financial literacy, using partnerships with Pact and SHE Investments, as well as innovative techniques to empower women and improve financial literacy.(3) It raised: >USD1mn seed-Insitor Partners (IP), SOSV and Loyal VC (LVC) [2021] >USD400,000 Pre-seed-IP and LVC [2019] (16)

BanhJi Pte. Ltd (Banhji), founded in 2013, develops an online accounting software for small and medium-size enterprises (SMEs) to help them use invoicing supported with automated in-depth analysis; manage purchases and expenses claim; integrate with customer, supplier, and accounting modules, analysis of multi-perspective general ledgers; manage financial statements and monthly tax complaints.

Through their transactional data, Banhji facilitates access to finance for the firms using the platform.(8) In 2016, BanhJi raised ~USD 17,878 in seed from Startupbootcamp and Startupbootcamp FinTech Singapore. (17) In 2020, Banhji received an undisclosed amount of investment from Smart Axiata Innovation Fund (SADIF). (18)

Expected Impact

Affordable financial services to enable SMEs to obtain loans and financial management to formalize their businesses and access financial institutions

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
> 25% (in ROI)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
USD 500,000 - USD 1 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
No Poverty (SDG 1) Clean water and sanitation (SDG 6)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Gender Equality (SDG 5) Decent Work and Economic Growth (SDG 8) Reduced Inequalities (SDG 10)
Sector Sources
  • (1) UNCDF. (2017). Cambodia Financial Inclusion Country Report 2017. https://finmark.org.za/system/documents/files/000/000/223/original/Cambodia_Synthesis-Note_28-September-2017.pdf?1601985666#:~:text=Cambodia%20has%20a%20moderate%20level,financial%20services%20through%20formal%20providers (2) Measuring Progress: Financial Inclusion in selected ASEAN countries, 2020 (UNCDF) (3) Badzmierowski, B. (2022). Investing for a Purpose in Cambodia: Sevea and Boost Capital. https://cambodiainvestmentreview.com/2022/03/15/investing-for-a-purpose-in-cambodia-sevea-and-boost-capital/ (4) BD Trust. (2019). Financial Access for MSMEs. https://www.unescap.org/sites/default/files/Session%205%20Financial%20Access%20for%20MSMEs.pdf (5) Kwanchainond, K. (2010). Small and Medium Enterprises Development Policies in Cambodia. https://www.asean.org/wp-content/uploads/images/archive/documents/SME%20Development%20Policies%20in%204%20ASEAN%20Countries%20-%20Cambodia.pdf (6) Sok, S. (2022). 70 Percent of Cambodians Have Access to Financial Services. Khmer Times. https://www.khmertimeskh.com/501052053/70-percent-of-cambodians-have-access-to-financial-services/#:~:text=About%2070%20percent%20of%20Cambodians,Bank%20of%20Cambodia%20(NBC) (7) Seng, S. (2020). How Small Businesses Have Coped with the Impact of COVID-19. http://www.cweacambodia.org/en/news-update/227/how-small-businesses-have-coped-with-the-impact-of-covid-19 (8) Gaudemar, M. (2016). Accounting Platform Seeks Fund. Phnom Penh Post. https://www.phnompenhpost.com/business/accounting-platform-seeks-funds (9) Ministry of Health. (2016). Health Strategic Plan 2016-2020. http://hismohcambodia.org/public/fileupload/carousel/HSP3-(2016-2020).pdf (10) World Bank. (2017). Individuals Using the Internet (% of Population)--Cambodia. https://data.worldbank.org/indicator/IT.NET.USER.ZS?end=2020&locations=KH&start=2000&view=chart (11) Sangeetha, A. (2021). Is Cambodia's Microfinance Sector Running its Course? https://www.phnompenhpost.com/special-reports/cambodias-microfinance-sector-running-its-course (12) UNIDO. (2021). FinTech Cambodia. http://unidoseoul.org/en/?p=6638&ckattempt=1 (13) Sok, S. (2022). 70 Percent of Cambodians Have Access to Financial Services. Khmer Times. https://www.khmertimeskh.com/501052053/70-percent-of-cambodians-have-access-to-financial-services/#:~:text=About%2070%20percent%20of%20Cambodians,Bank%20of%20Cambodia%20(NBC)
IOA Sources
  • (14) Boost Capital. (n.a.) Boost Capital: Enabling Digital Micro-Loans. https://www.boostkh.com/ (15) Kan, V. & Duncan, D. (2022). Digital Lending Shakes Up Cambodia's Over-indebted Banking Sector. https://www.voacambodia.com/a/6435615.html#:~:text=As%20of%20December%202020%2C%20a,of%2095%25%20of%20Cambodian%20households. (16) Crunch Base. (2022). Boost Capital. https://www.crunchbase.com/organization/boost-capital-db96 (17) Crunch Base. (2022). Banh Ji. https://www.crunchbase.com/organization/banhji (18) May, K. (2020). Smart Axiata Digital Innovation Fund Invests in Local Banh Ji, Thai-Based DRVE. https://www.phnompenhpost.com/business/smart-axiata-digital-innovation-fund-invests-local-banhji-thai-based-drvr (19) Statistica. (2022). Digital Payment. https://www.statista.com/outlook/dmo/fintech/digital-payments/cambodia (20) Statistica. (2022). Digital Payment. https://www.statista.com/outlook/dmo/fintech/digital-payments/cambodia (21) May, K. (2021). Affordable Finance Set for Women. https://www.phnompenhpost.com/business/affordable-finance-set-women (22) GrowJo. (2022). BanhJi Revenues and Competitors. https://growjo.com/company/BanhJi (23) Ibid. (24) Thy, S. (2021). Roles of SMEs in Cambodian Economic Development and Their Challenges. https://www.nbc.org.kh/download_files/macro_conference/english/Roles_of_SMEs_in_Cambodian_Economic_Development_and_Their_Challenges.pdf (25) Hin, P. (2019). Ministry: SMEs Vital to Economy, but 95% not Registered. https://www.phnompenhpost.com/business/ministry-smes-vital-economy-95-not-registered (26) UNESCAP. (2020). Landscape Study of Inclusive Business in Cambodia. https://www.unescap.org/sites/default/d8files/knowledge-products/Landscape%20Study%20Inclusive%20Business%20Cambodia%20ESCAP%20iBAN%202021%20REPORT%20Final.pdf (27) MOP 2021 (28) Royal Government of Cambodia. (2019). Cambodia's Voluntary National Review 2019 on the Implementation of the 2030 Agenda for Sustainable Development. https://sustainabledevelopment.un.org/content/documents/23603Cambodia_VNR_SDPM_Approved.pdf (29) Royal Government of Cambodia. (2018). Cambodian. Sustainable Development Goals (CSDGs) Framework (2016-2030). https://data.opendevelopmentmekong.net/dataset/3aacd312-3b1e-429c-ac1e-33b90949607d/resource/d340c835-e705-40a4-8fb3-66f957670072/download/csdg_framework_2016-2030_english_last_final-1.pdf (30) SME Bank. (2022). The Total Budget of SME Co-Financing Scheme II Increased to USD 240 Million. https://smebankcambodia.com.kh/2022/02/25/scfsii/ (31) National Bank of Cambodia. (2017). Financial Sector Development Strategy 2016-2025. https://www.nbc.org.kh/english/publications/blueprints.php (32) Royal Government of Cambodia. (2015). Cambodia Industrial Development Policy. https://www.eurocham-cambodia.org/uploads/97dae-idp_19may15_com_official.pdf (33) Royal Government of Cambodia. (1999). Law on Banking and Financial Institutions. https://www.nbc.org.kh/download_files/legislation/laws_eng/86004-Law-on-Banking-and-Financial-Institutions-1999.pdf (34) Royal Government of Cambodia. (2008). Law on Financial Lease. http://www.cambodiainvestment.gov.kh/en/law-on-financial-lease_090620.html (35) National Bank of Cambodia. (2015). Laws Applicable to Banks and Financial institutions. https://www.nbc.org.kh/english/legislation/laws_applicable_to_banks_and_financial_institutions.php (36) Open Development Cambodia. (2020). Sub-Decree No. 124 on the Tax Incentives for Qualifying SMEs Operating in Defined Priority Sectors. https://data.opendevelopmentcambodia.net/laws_record/sub-decree-no-124-on-the-tax-incentives-for-qualifying-smes-operating-in-defined-priority-sectors (37) Open Development Cambodia. (2020). Prakas No. 159 on the Instruction on Implementation of Tax Incentives for Small and Medium Enterprises. https://data.opendevelopmentcambodia.net/en/dataset/prakas-no-159-on-the-instruction-on-implementation-of-tax-incentives-for-small-and-medium-enterpris