Delegates pose for a photograph at the 2024 Annual Cambodia Microfinance Conference. Photo CMA
As of August 2024, microfinance institutions in Cambodia have provided loans totalling over $5 billion. The sector's assets are approximately $6.2 billion, according to Sum Sannisith, deputy governor of the National Bank of Cambodia (NBC).
Speaking at the 2024 Annual Microfinance Conference on "Sustainable and Inclusive Microfinance: Current Situation and Future Trends of the Sector" held in Siem Reap on November 4, Sannisith acknowledged several challenges that the sector is facing, and explained how the NBC is working to support the sector.
He explained that as of August, the microfinance sector in Cambodia had total assets worth 25 trillion riel (about $6.2 billion), with loans to customers amounting to 21.3 trillion riel (about $5.2 billion) across 1.6 million loan accounts.
He warned that the microfinance sector is currently facing several challenges, including over-indebtedness, a lack of financial literacy and limited customer protections.
In response to these issues, the NBC has issued and continues to develop regulatory frameworks, bank supervision frameworks and is taking pre-emptive measures to strengthen customer protection, in line with the development of Cambodia’s banking system.
“The NBC is highly committed to promoting financial literacy and customer protection by collaborating with relevant parties to organize workshops on 'The Microfinance Sector in Cambodia,' integrate financial literacy into general education, launch campaigns like 'Let’s Talk Money,' and increase financial knowledge for women and female entrepreneurship. We have also improved customer complaint resolution mechanisms through direct channels and a Hotline system,” Sannisith explained.
Sum Sannisith, deputy governor of the National Bank of Cambodia (NBC), addresses the conference on November 3. CMA
He noted that in the second half of 2024, the global economy has continued its post-Covid-19 recovery, but is influenced by the impacts of war, which has driven up inflation and tightened monetary policy, especially in the US and EU. In this context of slow global economic growth, Cambodia’s economic growth in 2024 has also been affected, with a growth rate of 6 percent.
“During this economic recovery phase, the NBC is continuing to maintain price stability, promote the use of the riel, implement appropriate monetary policies, strengthen banking system resilience, develop payment systems, enhance customer protection and financial security, and focus on responsible lending practices, among other initiatives," he said.
According to Sannisith, on October 8, the NBC collaborated with the Association of Banks in Cambodia (ABC) and the Cambodia Microfinance Association (CMA) to organise a workshop on "Promoting Financial Safety in the Community," a pilot project successfully conducted in four communes, with plans to expand it to additional communes and districts.
Dith Nita, chairwoman of the CMA, shared that about 74.4% of Cambodians live in rural areas, where access to financial services remains limited. The microfinance sector has played and continues to play a significant role in bridging this gap by providing essential funding access to individuals, as well as small and medium-sized enterprises (SMEs).
“The CMA continues to act as a unifying voice for its member institutions to ensure that rural communities receive quality and responsible financial services,” she said.
Dith Nita, chairwoman of the Cambodia Microfinance Association (CMA), also delivered remarks during the conference, held in Siem Reap. CMA
“The sustainability and inclusivity of the microfinance sector are crucial in ensuring that all Cambodians benefit from economic growth, particularly those in rural and underserved areas through accessible financial services and products,” she added.
According to the CMA, it currently has around 132 member institutions, with a total loan portfolio of approximately $5.11 billion, serving around 1.55 million customer accounts, 54% of them women.
Additionally, the four licensed deposit-taking institutions (LOLC, Mohanokor, Amret and AMK) collectively hold about $2.2 billion in deposits (a growth of 4.8%) from approximately 2 million depositors, 67% of whom are women.
