The government yesterday launched its updated development strategy for the financial sector, setting out policies and challenges for both the banking and non-banking industry.
The 124-page document looks back on the progress of the country’s financial sector in last 15 years and attempts to predict what must be done over the next decade.
Chea Serey, director-general of the National Bank of Cambodia, said the strategy will strengthen the financial sector in the country.
“Stable development of the economic sector will benefit the public,” Ms Serey said.
Finance Minister Aun Pornmoniroth said the government is committed to continuously updating the strategy to provide a favourable environment for delivering financial services in a modern, diversified and efficient manner.
“It will support sustainable and inclusive economic growth, increase living standards and the welfare of people, and respond to the need for regional economic and financial integration,” Mr Pornmoniroth said.
Samuiela Tukuafu, ADB country director for Cambodia, said the country’s financial sector has achieved a lot and contributed substantially to the national economy in the last 10 years.
“The high priority given by the government to the preparation of this strategy is in line with the current pace of Cambodia’s economic growth and the expectations of this sector,” Mr Tukuafu said.
“The formal finance sector needs to be further developed and made more efficient in supporting economic activities, and be accessible to all ordinary citizens, as well as being aligned to regional and international financial systems.”
Bun Mony, advisor to the Cambodia Microfinance Association (CMA), said that the long-term development strategy will be an important guideline for his industry.
“Before the finance sector in Cambodia was small, but it has grown significantly,” Mr Mony said.
“These guidelines will be important to further developing the fast growing sector.”
Ms Serey stressed that programmes on deposit insurance and financial literacy for schools are an important part of the strategy.
She said deposit insurance will be made available after research into the schemes is concluded. Financial literacy teaching will meanwhile be made part of the national curriculum.
“We are in talks with the Ministry of Education about putting financial literacy into the general curriculum for schools,” she said.
The establishment of deposit insurance is intended to build public confidence in the banking system and contribute to financial stability through eliminating the risk of bank runs, when large numbers of customers withdraw cash because they fear their institution could become insolvent.
The draft law and regulation on deposit insurance is expected to be ready for public discussion in 2018.
This is the third update of the financial sector development strategy, which was first adopted by the Council of Ministers in 2016.
For in depth analysis of Cambodian Business, visit Capital Cambodia