Financial Crime World

Cambodia’s Financial Inclusion Efforts: A Progress Report on Risk and Growth

Introduction

In a bid to bridge the financial gap for Cambodians, the Royal Government of Cambodia embarked on a Financial Inclusion Road Map and Action Plan in 2015 with assistance from UNCDF. The ambitious plan aimed to boost access to quality formal financial services, reduce women’s financial exclusion by half, and increase the usage of formal financial services among households.

Background

In 2017, a MAP Diagnostic report shed light on the country’s financial landscape, identifying key areas for intervention and providing a roadmap for policymakers. Recommendations included:

  • Promoting savings in formal institutions
  • Innovative credit products for small businesses
  • Expanding payment system capabilities
  • Robust regulation, consumer empowerment, and sector transparency

Progress Made

Two years on, a MAP Diagnostic Refresh report provides an update on the progress made towards these goals and assesses key market changes that have taken place since 2017. The report highlights financial inclusion interventions that can propel economic growth and deliver social benefits to Cambodians.

Challenges Persist

While significant strides have been made, challenges persist in achieving the ambitious targets set out in the Financial Inclusion Road Map. Despite efforts to increase access to formal financial services:

  • Women’s financial exclusion remains a stubborn issue, with 27% of women still without access to these services.
  • Progress has been made in promoting innovative credit products for small and medium-sized enterprises (SMEs) and micro-small enterprises (MSMEs), but more work is needed to reach the country’s broader SME sector.
  • The development of a well-functioning insurance market remains a key priority area.

Going Forward

The MAP Diagnostic Refresh report provides a roadmap for policymakers to accelerate financial inclusion efforts and drive economic growth in Cambodia. Key recommendations include:

  • Strengthening regulatory frameworks
  • Increasing consumer empowerment
  • Promoting innovative financial products and services

As Cambodia continues on its journey towards financial inclusion, this report serves as a timely reminder of the need for sustained effort and collaboration among stakeholders to achieve the country’s ambitious goals. With the right interventions and support, Cambodia can unlock the full potential of its financial sector and drive broad social benefits for its citizens.