ADB Approves $50m Loan to Boost Cambodia’s Inclusive, Sustainable Finance System

The financial sector plays a critical role in mobilizing capital for enterprises, especially small and medium-sized enterprises (SMEs) that form the backbone of Cambodia’s economy.

The Asian Development Bank (ADB) has approved a $50 million policy-based loan to strengthen Cambodia’s financial sector, marking a major step toward more inclusive, resilient, and sustainable economic development. The support comes under the Inclusive and Sustainable Finance Development Program, a multi-phase initiative designed to fortify both banking and nonbanking financial institutions, expand digital finance infrastructure, and build capacity for sustainable finance across the country.

The investment aligns with Cambodia’s long-term vision to achieve upper-middle-income status by 2030 and high-income status by 2050, underscoring financial sector modernization as a key pillar for national prosperity.

A Boost for Financial Inclusion and Economic Transformation

“Cambodia’s journey toward inclusive and sustainable growth is rooted in its vision to become an upper middle-income country by 2030 and a high-income country by 2050,” said Anthony Gill, ADB’s Acting Country Director for Cambodia. “Through this investment, ADB supports the country in boosting its financial sector, laying the foundation for resilient growth, expanding financial inclusion, and unlocking private sector potential.”

Gill emphasized that the program will help create a dynamic, transparent financial ecosystem that empowers households and businesses, attracts investment, and ensures economic gains are more widely shared across all segments of Cambodian society.

Cambodia’s Financial Sector: Progress Made, Challenges Ahead

The country’s financial sector has grown significantly over the past decade, especially through the expansion of microfinance institutions, rapid digital payments adoption, and increased banking activities. However, several structural weaknesses continue to constrain domestic market development. These include:

• Limited market depth and liquidity

• Restricted access for underserved groups, including women, rural communities, and small businesses

• Weak investor protection mechanisms

• Gaps in regulatory oversight and supervision

• Low levels of financial literacy

• Underdeveloped digital infrastructure

• Lack of a unified sustainability framework for climate-friendly investments

These gaps make the financial sector vulnerable to shocks, restrict the private sector’s growth potential, and reduce the ability of households to participate fully in the formal economy.

What the First Phase Will Achieve

The approved first phase of the program focuses on strengthening regulations, governance, and infrastructure. Key priorities include:

1. Strengthening the regulatory environment and financial stability

• Enhancing financial supervision and risk management

• Improving macroprudential oversight for banks and nonbank institutions

• Developing tools to identify systemic risks and emerging vulnerabilities

2. Deepening financial markets

• Encouraging diversified financial products

• Improving liquidity and investor confidence

• Expanding capital market participation

3. Improving consumer protection and financial literacy

• Implementing nationwide financial education initiatives

• Standardizing consumer protection guidelines

• Promoting responsible lending and transparent disclosures

4. Supporting digital finance and innovation

• Developing strategic roadmaps for financial technologies (fintech)

• Creating regulatory frameworks for digital assets, cryptocurrencies, and peer-to-peer financing

• Improving cybersecurity and digital client safety

• Encouraging innovation sandboxes and regtech solutions

5. Building a sustainability-focused financial system

To help Cambodia meet climate goals and support the transition to a greener economy, the program will:

• Establish a green finance working group

• Issue national guidelines for corporate sustainability disclosures

• Support the creation of sovereign sustainable bond frameworks

• Strengthen environmental, social, and governance (ESG) standards across financial institutions

Unlocking Private Sector Potential

The financial sector plays a critical role in mobilizing capital for enterprises, especially small and medium-sized enterprises (SMEs) that form the backbone of Cambodia’s economy. By strengthening financial stability and introducing modern financing tools, the ADB-backed program aims to:

• Expand credit access for SMEs

• Increase investment in climate-resilient and low-carbon industries

• Support women-led businesses and rural entrepreneurs

• Facilitate digital financial services for underserved communities

A more inclusive financial system will help reduce poverty, broaden economic participation, and stimulate job creation.

A Foundation for Sustainable, Long-Term Growth

The programmatic approach ensures that future phases will build on the regulatory reforms and infrastructure established in Phase 1. Over time, Cambodia’s financial system is expected to become:

• More competitive

• More transparent

• More resilient to shocks

• Better equipped to mobilize private and public investment

• More capable of supporting national climate and development goals

ADB’s Continued Commitment to Cambodia

This latest financing marks ADB’s ongoing commitment to supporting Cambodia’s development, particularly in areas related to economic governance, sustainable growth, and financial inclusion.

As Cambodia continues its transition toward a more diversified and modern economy, the strengthening of its financial sector will be critical to ensuring stability, supporting productive investment, and securing prosperity for all.