Cambodia's central bank hosts summit on microfinance sector development

The National Bank of Cambodia on Monday hosted a national summit on the development of microfinance sector with an aim of underscoring the sector's vital role in economic development and in poverty alleviation.

Addressing the opening ceremony of the two-day event here, Prime Minister Hun Sen said the summit marked the 10-year anniversary since the government held the first one in 2006 and declared that year "The Year of Microfinance".

"The objective of the national summit today is to promote public awareness on the development of the microfinance sector in Cambodia over the last decade and its important role in the development of the nation's economy and in poverty alleviation, which are key components in the government's national strategies," he said.

He said the country's poverty rate has remarkably fallen to 14 percent in 2014 from over 53 percent in 2004.

Meanwhile, the prime minister urged all microfinance institutions (MFIs) to assess the possibility of borrowers' repayment before providing loans to them so as to avoid the seizure of collateral when debtors are unable to repay their debts on schedule.

He also advised the central bank and local authorities to closely watch some organizations that have cheated people through promising high interest rates for depositing money in their organizations.

According to the latest figures of the Cambodian Microfinance Association, the kingdom's 64 MFIs had lent 2.95 billion U.S. dollars to customers last year, up 45 percent year-on-year. Some 2 million people had borrowed money from the MFIs as of last year, up 14 percent year-on-year.

Also, the MFIs received the deposits of 1.32 billion U.S. dollars last year, up 46 percent year-on-year. The number of depositors at the MFIs reached 1.42 million last year, up 27 percent year-on-year.

According to Hun Sen, the average interest rate the MFIs charged had declined from 36 percent per annum in 2006 to 23.7 percent in 2015. Enditem