Samdech Akka Moha Sena Padei Techo Hun Sen, Prime Minister of the Kingdom of Cambodia, has laid stress on the key role of microfinance sector in reducing poverty in Cambodia.
“Microfinance sector in Cambodia has played an important role in reducing poverty, improving people’s living standards because financial service has been expanded to rural areas and credit is accessible by low-income earners who really need additional investment capital,” said the Cambodian premier at the opening ceremony of the National Conference on the Development of Microfinance in Cambodia yesterday.
Having access to capital has boosted the enhancement of production capacity, modernization of production process, diversification of products and improvement of the standard of Cambodian products, which has contributed to the economic efficiency, he underlined.
This intermediation role will become more economically efficient if Cambodian people have access to this service throughout the country, as the United Nations acknowledged that the “rural and low-income dwellers’ access to affordable financial service is the key to poverty reduction and sustainable economic development,” he added.
Currently, he pointed out, approximately 51 percent of total Cambodian adults are using formal financial service. This number is a significant increase compared to ten years ago.
According to the premier, the microfinance sector has significantly contributed to reducing the gap between the rich and the poor and between the urban and rural areas. “Indeed, we manage to reduce poverty by more than 1 percent per annum during the past years resulting in poverty rate declining from 53 percent in 2004 to 16 percent in 2013 while GDP per Capita increasing from US$760 in 2008 to US$1,225 in 2015 which make Cambodia graduate to a lower-middle income country,” he said.
Samdech Techo Hun Sen also attributed the remarkable progress of the microfinance sectors in terms of both capital and service coverage during the past ten years to peace, political stability and macroeconomic stability, particularly the public financial reform which streamline the management and implementation of government fiscal policy.
The prime minister expressed the Royal Government of Cambodia’s firm commitment to maintaining the financial sector stability and promoting development of the banking and financial sector in general and the development of microfinance sector in particular, to contribute to economic development through laying out a number of policy measures and creating an environment conducive to economic development, especially the firm adherence to free market principle and fair competition.
Cambodia has adopted a series of financial development strategies, including “Financial Sector Development Strategy 2011-2020” which focuses on the development and the establishment of microfinance regulatory framework with the aim of pooling and allocating the resources in order to promote financial inclusiveness to support the sustainable growth of the economy, he said.
The two-day National Conference on the Development of Microfinance in Cambodia was held to review the work achievements in a decade since Cambodia Microfinance Association was officially formed in 2006, which was declared the “Year of Microfinance in Cambodia”.