Developing education within the East Asia Pacific region is a key priority for IFC. One way we endeavor to achieve inclusive growth is to provide critical support to learning institutions in countries like Cambodia.
Cambodia as a country and emerging market has been progressing at pace but one sector that needs improvement and investment is education.
In recent years there has been a growing demand for accredited higher education institutions that can deliver trained professionals to meet expanding labor market needs.
In April 2014, the Royal Government of Cambodia announced its Higher Education Vision 2030 which flagged post-secondary education as a national priority. The administration aims to raise its higher learning facilities to become internationally competitive.
To date, Cambodia’s schooling system lacks quality assurance and credibility especially at the post-secondary level which leads to low degree recognition. There is an immediate call for academic institutions to revamp their programs to better serve the labor market.
Investing in People
One of IFC’s long-standing clients, ACLEDA Bank, has been actively addressing this gap in professional skills development since 2000, as it is the largest graduate recruiter in the country hiring thousands of graduates every year. Cambodia’s leading financial institution, ACLEDA Bank initially sought to meet in-house training demands in 2000 by launching a training division. A decade later the bank set up the ACLEDA Training Center (ATC) to cultivate promising business professionals.
Now the Bank, with support from IFC, is broadening its reach by offering business, banking and finance programs at Associate, Bachelor and Master's degree levels.
The ACLEDA Institute of Business (AIB) in Phnom Penh aims to become the nation’s leading higher education institute for business and finance. “AIB is the largest education project in the country,” said Binh Quoc Nguyen, IFC Investment Officer.
IFC was instrumental in helping the Bank develop its vision into a viable project that not only responds to demands for higher education but also attracts outside investment, said Nguyen. “Two years ago, while at IFC’s Annual Education Conference, we sat down with ATC and discussed AIB's business plan, then helped them structure a financial package with our input.”
IFC has committed a $13 million loan toward the development of the business school which requires $39 million in total including the initial land purchase for the campus expansion, ACLEDA Bank’s equity investment in the project will total $20 million. Another financial institution is expected to contribute the remaining $6 million.
This is IFC’s first investment in Cambodia’s education sector, a project that adds to a growing portfolio within emerging markets. Over the past 15 years, IFC has invested $1.5 billion in more than 110 education projects across 39 countries.
IFC Senior Education Specialist, Mohammed Ali Khan said: “As a leading financial player, ACLEDA is well positioned to meet the human capital needs of the sector and other emerging industries.”
A Green Campus
Campus construction begins this year and will include at least two school buildings, one administrative building, a library, canteen, bookstore and two dormitories. AIB is the country’s first educational project designed to meet IFC’s Green Building standards, meaning it will achieve 20 percent energy savings. “In fact, we are looking to help the country form its own set of green building regulations,” said Nguyen. Scheduled for completion in 2018, AIB will accommodate an additional 3,300 students and 3,100 training participants.
Courses will encompass a vast array of banking and finance subjects such as micro small and medium enterprise (MSME) lending, anti-money laundering practices, assets and liabilities management, marketing, financial planning, internal auditing, loan management, human resource training, among others.
“In Cambodia, ACLEDA Bank is well positioned in the industry with a proven track record and a strong corporate culture. It operates with best practice standards and a high level of integrity, making ACLEDA a good partner in development for IFC,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR.
Both education and social responsibility are inherent interests of ACLEDA’s management, instilled by President & Group Managing Director Dr. In Channy. “A lot of the company’s current culture transpires from him,” said Nguyen. “He’s an icon in Cambodia.” Dr. In Channy and several of the Bank’s managers were once teachers who personally value the importance of education.
The locally owned and managed company was once a non-profit, non-governmental organization (NGO) that helped rural entrepreneurs gain financing. ACLEDA’s precursor worked with micro-finance institutions (MFIs) and was sponsored by the Cambodian and German governments. The Bank now has 258 branches offices with 12,125 employees. Most of its 431,000-plus active borrowers are within the micro finance and SME segment.