At a Glance
• Leading microfinance institution serving over 330,000 customers across Cambodia
• Temenos Financial Inclusion deployed in 2017 to support digitization and expand inclusion
• Upgrade to R22 in 2024.
• 57% customer growth since 2017, supported by a scalable and future-ready core banking system
• Expanded General Loan Portfolio (GLP) by 308% and almost halved its cost to GLP ratio to 4.31%
• Operational efficiency gains, including reduced manual processes and enhanced reporting capabilities
LOLC Cambodia is one of the country’s largest and most mission-driven microfinance deposit-taking institutions (MDIs). With a strong focus on rural communities, the institution provides a range of financial services aimed at empowering underserved populations. Alongside loans, it also offers deposits, a mobile banking application, ATM cards, and local fund transfer services. Since its founding in 1994, LOLC Cambodia has grown to serve over 330,000 customers, with loan assets exceeding $1.5 billion and customer deposits surpassing $1 billion. LOLC is nationally ranked first for number of borrowers and second for loan portfolio and deposit balance. It employs 3,700 people.
Despite this scale, LOLC’s mission remains elegantly simple.
Our goal is to provide financial services to those who need them most, with speed and convenience.”
Mr. Sok Sophal, CFO/DCEO at LOLC (Cambodia) Plc
To this end, it has maintained a focus on the low end of the market, with 79% of its clients based in rural areas, and 60% of its loan book made up of group loans and micro loans.
The case for change
Prior to 2017, LOLC was hampered in a number of ways. The legacy core banking system had to be deployed as separate environments in each branch, resulting in significant technical support to maintain them and enable new branch openings. For example, database backups were carried out in individual branches and sent to HO for consolidation, while data was manually written from CD/DVD to tape drive for retention. Product updates required hard coding or SQL server scripting. There was an over-reliance on third-party applications to support some core processes, such as updating loan repayment schedules with EIR (Effective Interest Rate) and generating key reports such as the Customer Poverty Index. Also, individual databases were needed for each currency.
These inefficiencies filtered through to the customer experience. Manual onboarding processes made it difficult for new customers—especially in rural areas—to access financial services quickly. The outdated core banking system lacked flexibility and automation, limiting LOLC’s ability to scale. Regulatory requirements, including IFRS compliance, demanded a more robust reporting and risk management framework. At the same time, a rapidly evolving digital landscape was opening up new opportunities to integrate with mobile banking and real-time payments—such as Cambodia’s Bakong platform—which LOLC was not equipped to take advantage of.
Aligning strategy with solution
In 2017, LOLC implemented Temenos Financial Inclusion as the foundation for its modernization strategy. The decision to select Temenos initially rested on three essential attributes, recalls Sophal
First, cost efficiency. Temenos was shown to offer significant savings over time due to lower maintenance costs and the reduced need for expensive customizations. The standardized configurations and open architecture also contribute to a lower TCO. Moreover, ease of scalability has ensured that costs remain predictable and manageable as the bank expands.
Industry leadership was a second factor.
Temenos has a long-standing reputation in the banking industry, with extensive experience in delivering core banking solutions to a wide range of financial institutions.”
Mr. Sok Sophal, CFO/DCEO at LOLC (Cambodia) Plc
Finally, LOLC was impressed by the pool of leading technology and consulting firms, certified professionals, and partners in the Temenos ecosystem. These alliances bring additional domain expertise, product innovation, and know-how of successful implementations, giving LOLC peace of mind that modernization could be sustained.
Alongside these strategic pillars were specific capabilities of Temenos Financial Inclusion that marked it out. These included automation and STP to increase operational efficiency; integration with digital banking, CRM, and regulatory platforms; real-time and cross-border transaction processing; multi-branch and multi-country flexibility; the availability of the Product Builder (Wizard) and the ability to originate loans from all channels.
Summarizing its decision, Sophal says, “We selected Temenos Financial Inclusion for long-term scalability, automation, digital transformation, and inclusivity.”
Building on success
In 2024, LOLC completed the upgrade to R22. The update included, among others, migration from TAFC to TAFJ; new hardware, databases, and OS; integration with multiple third-party systems and devices; and the implementation of 12 new modules.
The technical complexity of the upgrade was coupled with stakeholder challenges, explains Duleep Liyanage, CIO. “Colleagues had become very familiar with the R14 version and were resistant to change. We were very conscious about bringing all users with us, so training and communication were a priority.”
The move to R22 was managed by Temenos Upgrade Services (TUS). “They brought a very holistic and systematic approach to the project,” recalls Duleep
They implemented a robust governance structure, established clear communication channels, conducted extensive testing, and applied operational know-how, such as setting optimal data migration volume levels.”
Duleep Liyanage, CIO at LOLC (Cambodia) Plc
Duleep adds that TUS was also highly aware of the importance of stakeholder engagement, with user feedback sessions, incentives and rewards, and milestone celebrations forming a key part of the upgrade project.
Modernization in action
The solution has delivered on its promises. From 2017 to 2024, LOLC expanded its General Loan Portfolio (GLP) by 308%, saw customer numbers grow by 57%, and almost halved its cost to GLP ratio to 4.31%.
Behind these numbers is a modern customer experience. Users are able to open accounts and access services in a fraction of the time and select from a range of highly personalized products. New offers are continually developed and deployed, increasing choice. Digital transactions include integration with Cambodia’s Bakong real-time payment platform to allow instant fund transfers across mobile. Advanced fraud detection, encryption, and real-time monitoring have improved security and trust. And the adoption of IFRS 9 accounting standards has enhanced LOLC’s ability to monitor non-performing loans and manage credit risks effectively.
Tangible impact
Growth numbers alone don’t tell the whole story. “Temenos Financial Inclusion has had a tangible impact on the lives of its customers,” says Sophal. Faster access to loans has helped small businesses and farmers secure funding without long delays. New loan products for women entrepreneurs and small businesses are increasing inclusion and boosting entrepreneurship in the country. Mobile banking adoption has surged, enabling customers in remote areas to manage accounts, send payments, and receive funds without visiting a branch. And simplified deposit services now allow families to save for their future more effectively.
For many of our customers, digital banking is their first experience with formal financial services. Temenos has made it possible for us to bridge that gap and provide them with safe, reliable banking.”
Duleep Liyanage, CIO at LOLC (Cambodia) Plc
Leading from the front
With Temenos Financial Inclusion firmly in place, LOLC is looking ahead. Plans are underway to expand digital lending services, enabling even more customers to access credit with minimal paperwork. LOLC is also working to enhance real-time analytics, using AI-powered insights to better understand customer needs, and explore new financial products such as insurance and investment solutions tailored for Cambodia’s microfinance market.
“With Temenos, we are not just keeping up with change—we are driving it. We are building the future of financial inclusion in Cambodia,” says Duleep.
By adopting Temenos Financial Inclusion, LOLC has positioned itself as a leader in inclusive banking, ensuring that more Cambodians—especially those in rural areas—have access to modern financial services. With improved customer experiences, faster onboarding, and a scalable platform for future growth, LOLC is setting new benchmarks in the microfinance industry.
That elevates its relationship with Temenos well beyond a client/vendor, explains Duleep. “Temenos is more than a technology provider; it is a partner in our mission to bring financial services to those who need them most and an indispensable part of our success story.”
