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Cambodia – Microfinance contribution to Kingdom’s development notable: CMA
Cambodia has a rapidly developing microfinance sector with funding from domestic and international operators. Microfinance institutions represent the main providers of financial services in rural areas. Still, there are several challenges including issues concerning external funding, financial regulations and political challenges, along with credit access and signs of non-performing loans.
There were increases in terms of the loan portfolio and the number of borrowers at the end of 2021, according to the Cambodia Microfinance Association (CMA). At the end of 2021, the loan portfolio totalled $ 8.229 billion and the number of borrowers increased to more than 2 million.
CMA Executive Director Phal Vandy explained that microfinance plays a key role in shaping economic growth. Microfinance has contributed to socio-economic growth and reduced the poverty rate by providing products and services in rural areas.
Vandy confirmed that credit to sectors such as households in 2021represented 33.3 percent of total credit, the construction sector made up 3.8 percent, the agriculture sector represented 18.8 percent, the transportation sector totalled 5.5 percent, the services sector represented 14 percent, the commerce and business sector was 21.8 percent and the manufacturing sector is represented 1.5 percent.
CMA Communications Department Director Kaing Tongngy told Khmer Times the finance sector plays a crucial role in supporting Cambodia’s economic growth by injecting much-needed capital into other sectors such as manufacturing, agriculture, trade, construction and real estate. The sector also supports economic recovery plans led by the government such as the work of SME Bank and the CGCC.
“For the microfinance sector, we are quite optimistic about 2022 and expect the sector to grow healthily due to the lower Covid-19 impact, high vaccine rate and people become accustomed to living with the pandemic. But CMA, as the microfinance sector representative, will watch the sector‘s movement carefully,” he said. By the end of 2021 CMA’s 119 members, including four banks, restructured loans for 360,000 clients with a total loan portfolio of $1.734 billion.
Source: https://www.khmertimeskh.com/501012590/microfinance-contribution-to-kingdoms-development-notable-cma/