Cambodia hosts meeting to discuss microfinance amid global financial crisis

With the helps from the International Financial Corporation (IFC) and the European Union (EU), Cambodia is hosting a conference to talk on how microfinance can boost country's economy, promote financial inclusion and enhance customer protection.

The IFC which is a member of the World Bank Group is helping Cambodian microfinance institutions to strengthen their contribution to the country's socio-economic development, and expand financial services to the rural population amid the global financial crisis.

The two-day meeting, which began Wednesday, participated by representatives from the Cambodia Microfinance Association, senior microfinanciers, bankers, regulators, and local authorities.

"The microfinance sector in Cambodia has grown fast and significantly contributed to improving access to financial services for the rural population," said Chea Chanto, governor of the National Bank of Cambodia.

"The success of the sector is vital to ensuring quick financial inclusion. We have adopted legislation that enables microfinance institutions to mobilize public deposits to help them access cheaper sources of funds while allowing rural populations to safely save their hard-earned cash," he said.

Participants also shared their views and experiences on how to respond to the global financial crisis, addressing credit culture, risk and nonperforming loan management, ethical debt collection practices, financial education, and consumer protection.

"The microfinance sector, which has loans of more than 280 million U.S. dollars outstanding to about one million clients in rural areas, already has felt the impact of the global financial crisis as no performing loans have increased from under one percent one year ago to 3.8 percent as of June 2009," said Huot Ieng Tong, president of Cambodia Microfinance Association.

IFC also works with individual microfinance institutions to help them diversify and focus their strategies, expanding their product range and improving their risk management capabilities.

"While the crisis has adversely affected microfinance institutions and their borrowers, it also brings opportunities for them to review their lending practices and risk and nonperforming loan management systems so they become more resilient to future crises," said Russell Muir, IFC Acting Head of Advisory Services for East Asia and Pacific.

Source:Xinhua