The Association of Banks in Cambodia (ABC) yesterday signed memorandums of understanding with the Ministry of Environment, the National Bank of Cambodia and USAID to strengthen cooperation in sustainable financing.
In Channy, ABC chairman, said the agreement aims to eliminate financing that leads to environmental impacts like deforestation or air pollution.
“Loans will not be granted to businesses that pose a risk to the environment,” Mr Channy said. “We don’t do business just for profit – we also take into consideration our impact on the planet,” he said.
He said banks play a critical role in combating environmental degradation because they provide the funding needed for the activities that lead to that degradation.
Lay Rachana, ABC chairwoman, said the association has about 60 members, 48 of which had signed the MoU adhering to the principals of sustainable financing cooperation.
“The ministry will feed us information regarding business activity that poses a risk to the environment. That information will be compiled in a system developed with the help of USAID.”
The system will be accessible by banks before granting a loan, Ms Rachana said.
ABC said that Cambodia could be the first Greater Mekong Subregion nation to implement a sustainable financing scheme to protect the environment.
Lee Sang, director of the Food Security and Environment Office of USAID Cambodia, said USAID has supported ABC on its sustainable financing initiative since 2015.
She said the organisation will continue its support to the initiative to strength green economic growth in the country.