Asian Development Bank approves $40 million loan to help promote financial inclusion in Cambodia
The Asian Development Bank (ADB) approved a $40 million loan and a $600,000 technical assistance grant on Friday to help strengthen Cambodia’s financial sector and promote financial inclusion within the country’s unbanked population, according to the ADB’s statement.
The loan and technical assistance grant was given through the ADB-funded Inclusive Financial Sector Development Program (IFSDP). When implemented, the program is expected to produce potential economic gains of up to $391 million a year, or 2.3 percent of the country’s gross domestic product.
“The IFSDP will help to bring these people into formal financial services by supporting the development of an efficient and stable financial sector,” the statement said.
“Policy support and enhanced consumer protections will be expected to benefit rural households, farmers, and small and medium-sized enterprises. The program will upgrade existing financial sector infrastructure to support the introduction of new services and products,” added the statement.
Cambodia’s impressive economic growth over the past several years has pushed poverty levels from 47.8 percent in 2007 to 13.5 percent in 2014.
However, according to the ADB, many Cambodians are still vulnerable to poverty, particularly those in rural areas – where 90 percent of poor people live — and with 41 percent of the population living on $2 a day or less.