PHNOM PENH: A loan of $40 million has been approved by the Asian Development Bank (ADB) to support Cambodia's efforts in expanding credit access to micro, small and medium enterprises (MSMEs). The loan will also be used to improve infrastructure and promote financial stability, as well as adopting key laws that support the government’s National Financial Environment Strategy.

That’s the third program of financial sector development after the implementation of two previous programs from 2016 to 2019. ADB financial specialist, Benita Ainabe, says, the “Royal Government has made significant steps in maintaining financial stability and improving crisis management in the wake of the Covid-19 pandemic".

In Cambodia, access to financial products and services is limited. Only 18% of Cambodians are considered financially literate, with only 21.7% of the country's adult population having a bank account. As a consequence, market development for small and medium enterprises is a challenge and the trends of real estate lending and faster credit growth have increased risks to Cambodia's financial stability.

The new ADB loan will support financial and credit reforms to the Kingdom as part of the Royal Government's National Strategic Development Plan for 2019-2023, as well as the Financial Sector Development Strategy for 2016-2025.