The Asian Development Bank (ADB) has approved $40 million in loans and $600,000 in grants to improve Cambodia’s banking system.
In a statement on Tuesday Hiroyuki Aoki, a senior financial specialist at the ADB’s Southeast Asia department, said many Cambodians still lacked access to banking services
"This project will help the government to develop the financial sector in pursuance of reducing the number of people who did not have access to financial services and promoting the growth of inclusive data,” he said in the statement.
The program is intended to enhance the infrastructure of existing financial sectors to create new products and services that will bring in more people to the formal financial system.
In Channy, head of Acleda Bank, said the extra finance would decrease poverty by allowing banks to lend more to those without access to formal finance schemes.
“When they have capital to invest, they are able to operate new businesses and expand them,” he said. “The operation and expansion of business creates job opportunities since they can offer jobs to those who are in need or unemployed.”
Raingsey Visoth, secretary of state at the finance ministry, said more than 50,000 micro-finance institutions operated in Cambodia, but many provided “non-standard” loans that were mismanaged and further contributed to rural poverty.