ADB continues its support of Kingdom’s financial inclusion
THE Asian Development Bank (ADB) has approved a $40 million policy-based loan to support poor and rural households and improve their financial access, it said. The loan is for the second sub-programme of the bank’s Inclusive Financial Sector Development Programme – approved in October 2016 – which builds on the government’s ongoing financial inclusion and development efforts, it said.
The sub-programme, it said, will support the government in finalising its National Strategy for Financial Inclusiveness 2019-2025 and provide a framework to broaden access to financial services.
The strategy will focus on poor and rural households, women borrowers, the agriculture sector and micro, small, and medium-sized enterprises (MSMEs), it said.
ADB financial sector specialist for Southeast Asia Benita Ainabe said through policy support, the bank is also enhancing the stability of Cambodia’s financial sector and upgrading financial infrastructure to support the introduction of new financial services and products.
“A stable and modernised financial sector is important for a developing country like Cambodia so that individuals can have easy access to formal financial services and businesses can borrow reliable capital to expand their operations and contribute to the country’s growth,” she said.
Ministry of Economy and Finance spokesman Nup Sothunvichet declined to comment on Monday but said the ministry will soon sign up to the project.
Ly Ly Food Industry Co Ltd CEO Keo Mom told The Post on Monday that the private sector currently faces challenges in accessing finance from commercial banks and microfinance institutions for expanding investments.
She said the fund provided by ADB will boost the MSME sector’s financial access through the government.
“The government often helps the private sector by providing technical assistance and short workshops. I hope this project will help us more,” she said.
ADB said Cambodia’s financial sector is in its early stages of development and is dominated by the banking and microfinance subsectors.
Though much has been achieved, access to finance remains limited, especially in rural areas, said the bank.
Financial inclusion is low, with only about 59 per cent of the adult population in the Kingdom having access to formal financial services in 2015, it said.
Moreover, nearly one-third of the population is completely excluded, without access to any form of financial service.
Efforts to improve access to finance have been constrained by low levels of financial literacy, it said.