Cambodia, UN Push for Microfinance Reform Amid Rising Borrower Risks

PHNOM PENH, Cambodia (Sept.25, 2025) — Cambodia’s central bank and the United Nations are ramping up pressure on microfinance institutions to adopt stricter lending norms and consumer protections, as borrower vulnerability and post-pandemic debt risks continue to mount.

At a high-level convening co-hosted by the National Bank of Cambodia (NBC) and the UN in Phnom Penh, officials unveiled progress on a sweeping 22-point reform plan launched in 2023. Central Bank Governor Chea Serey said 10 measures have been completed, with the remainder—including a new Code of Conduct and responsible pricing framework—set for finalization by year’s end.

“We are building a fair, inclusive and resilient financial ecosystem for all Cambodians,” Serey said, citing efforts to cap lending rates, limit payment terms, and reduce outdated collateral requirements.

The meeting drew over 160 stakeholders from government, finance, civil society and academia. Participants backed the creation of a second emergency relief fund for distressed borrowers and a centralized Financial Consumer Center to streamline complaints and enforce standards.

Analysts say the reforms mark a turning point for Cambodia’s microfinance sector, which has faced criticism over aggressive lending and household debt. A follow-up convening is planned for 2024 to assess implementation and impact.

By the end of 2024, Cambodia’s microfinance sector remained a vital pillar of financial access, especially for rural and underserved communities. The country had a total of 84 licensed microfinance institutions operating nationwide, including both deposit-taking and non-deposit-taking entities.

The number of active microfinance borrowers exceeded 2 million, with loans primarily directed toward agriculture, small-scale trade, real estate, and personal consumption. Despite concerns over household debt, demand for microfinance services remained steady.

Total outstanding loans across Cambodia’s banking and financial sector reached nearly 60 billion U.S. dollars, reflecting cautious growth of just 3 percent compared to 2023. This slowdown was attributed to tighter lending standards and increased focus on responsible financing. Meanwhile, total deposits climbed to approximately 57 billion U.S. dollars, marking a year-on-year increase of 16.3 percent—an indicator of growing public trust in formal financial institutions.

These figures underscore the importance of ongoing reforms aimed at strengthening consumer protection, improving financial literacy, and ensuring sustainable lending practices. The National Bank of Cambodia and development partners continue to push for a more inclusive and resilient financial ecosystem.