Phnom Penh, Cambodia, August 19, 2009
—IFC, a member of the World Bank Group, is helping Cambodian microfinance institutions strengthen their contribution to the country’s socio-economic development, and expand financial ervices to the rural population amid the global financial crisis.
Beginning today, at a two-day forum co-organized by the National Bank of Cambodia, IFC, the European Union, and the Cambodia Microfinance Association, senior microfinanciers, bankers, regulators, and local authorities will discuss how microfinance institutions could boost the country’s economy, promote financial inclusion, and enhance customer protection.
“The microfinance sector in Cambodia has grown fast and significantly contributed to improving access to financial services for the rural population,” said H.E Chea Chanto, Governor of the National Bank of Cambodia. “The success of the sector is vital to ensuring quick financial inclusion. We have adopted legislation that enables microfinance institutions to mobilize public deposits to help them access cheaper sources of funds while allowing rural populations to safely save their hard-earned cash.”
Participants also shared their views and experiences on how to respond to the global financial crisis, addressing credit culture, risk and nonperforming loan management, ethical debt collection practices, financial education, and consumer protection.
“The microfinance sector, which has loans of more than $280 million outstanding to about a million clients in rural areas, already has felt the impact of the global financial crisis as nonperforming loans have increased from under 1 percent a year ago to 3.8 percent as of June 2009,” said Huot Ieng Tong, President of Cambodia Microfinance Association. “However, given the current crisis, this increase is reasonable and NPLs are still low by international standards.”
IFC also works with individual microfinance institutions to help them diversify and focus their strategies, expanding their product range and improving their risk management capabilities.
“While the crisis has adversely affected microfinance institutions and their borrowers, it also brings opportunities for them to review their lending practices and risk and nonperforming loan management systems so they become more resilient to future crises,” said Russell Muir, IFC Acting Head of Advisory Services for East Asia and Pacific.
In Cambodia, IFC advisory services are delivered in partnership with the European Union, Finland, Ireland, the Netherlands, New Zealand, and Switzerland.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $15 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
.
