Phnom Penh: The Cambodian Microfinance Association (CMA) is committed to collaborating with both national and international partners to safeguard vulnerable populations and maintain microfinance as a valuable tool for economic empowerment. Since 2024, the National Bank of Cambodia (NBC) and the United Nations (UN) have led a significant consultation to address key challenges within Cambodia’s microfinance sector, including over-indebtedness, land-related financial risks, and consumer protection.

According to Agence Kampuchea Presse, this initiative, now in its active phase, engages over one hundred stakeholders from government bodies, civil society, financial institutions, and development partners to enhance lending practices and ensure the sector’s long-term sustainability. The CMA is determined to collaborate with partners to ensure that microfinance in Cambodia continues to serve those in need. ‘We recognise the challenges borrowers face and are actively working to improve lending practices and strengthen consumer protections. Our efforts aim to empower borrowers to make informed decisions while safeguarding their rights,’ said Mrs. Dith Nita, Chairwoman of the CMA.

The CMA is addressing several critical issues, including the implementation of enhanced lending standards. In partnership with the NBC and the UN, the CMA is supporting reforms to ensure that loans are granted based on a borrower’s ability to repay, rather than relying solely on collateral. A key measure involves prohibiting the use of Indigenous Communal Land Titles (ICLTs) as collateral, thereby protecting vulnerable communities from the risk of land loss.

Additionally, the CMA is supporting the expansion of the Financial Consumer Centre under the Association of Banks in Cambodia (ABC), which provides borrowers with access to dispute resolution services and enhanced protections. The CMA is also advancing financial literacy programmes, particularly targeting women and rural communities through the Safe Community Finance Project, to help borrowers make informed financial decisions and reduce the risk of over-indebtedness.

‘Together with our partners, we are working to build a financial sector that is inclusive and offers meaningful opportunities for Cambodia’s most vulnerable populations. Our goal is to equip borrowers with the tools needed to succeed financially while protecting them from financial risks,’ added Mrs. Dith Nita.

These efforts align with the United Nations Sustainable Development Goals (SDGs), particularly in the areas of poverty reduction, gender equality, and financial inclusion, ensuring that Cambodia’s microfinance sector remains a powerful engine of economic growth and opportunity. As the consultation progresses, the CMA urges all stakeholders-investors, policymakers, regulators, civil society, financial institutions, and development partners-to unite in shaping Cambodia’s microfinance sector.

‘Through collective action, we can ensure that vulnerable populations are protected and that microfinance continues to empower and provide economic opportunities for all Cambodians,’ underlined CMA.