The Asian Development Bank ( ADB ) has announced a US$50 million policy-based loan to strengthen Cambodia’s financial sector.

In a statement released on November 24, the bank says the loan will support banks and non-banks along with digital finance infrastructure and sustainable finance capabilities.

The loan is under the ADB’s Inclusive and Sustainable Finance Development Programme, which aims to enhance the sector’s capacity, stability, and performance, positioning Cambodia for more inclusive and resilient economic growth.

“Cambodia’s journey toward inclusive and sustainable growth is rooted in its vision to become an upper middle-income country by 2030 and a high-income country by 2050,” says Anthony Gill, the ADB’s acting country director for Cambodia.

“Through this investment, ADB supports the country in boosting its financial sector, laying the foundation for resilient growth, expanding financial inclusion, and unlocking private sector potential.

“By fostering a dynamic and inclusive financial ecosystem, we aim to empower businesses, attract investment, and ensure that prosperity reaches every corner of society.”

‘Further development needed’

Although Cambodia’s financial sector has made notable progress, the bank notes that “further development is needed to unlock its full potential”.

Challenges include limited market depth, restricted access, and gaps in investor protection. Among other hurdles are underdeveloped regulatory frameworks, low financial literacy, and inadequate digital infrastructure.

Meanwhile, the absence of a unified sustainability framework is seen limiting its progress towards inclusive finance and climate goals.

The programe’s’s first phase focuses on improving the regulatory environment, financial stability, market depth, and consumer protection.

It will also advance strategic plans for financial technology, regulatory frameworks for digital assets and cryptocurrencies, and peer-to-peer financing.

To help develop inclusive financial technology, the programme will implement financial education strategies.

It will also set up a green finance working group, issue guidelines for corporate sustainability disclosures, and establish mechanisms for sovereign sustainable bond issues to enhance the sustainability framework.