May 18, 2022

Financial Institutions Reject Allegation of Microfinance Abuses by Two Civil Society Organisations

The Association of Banks in Cambodia (ABC) and the Cambodia Microfinance Association (CMA) have tirelessly exerted themselves to serve and help the people, promoting financial inclusion, poverty alleviation and economic growth.

The ABC and CMA said in a joint statement on May 10 in response to the allegation of Microfinance abuses in Cambodia by two civil society organisations on filing a complaint to the International Finance Corporation (IFC)’s independent accountability mechanism, the Compliance Advisor Ombudsman.

In the statement, they said actions have been taken to ensure the respect of Client Protection Principles, one of the core agenda items of all Banks/FIs, who have been engaging in the National Financial Inclusion Strategy (NFIS) 2019-2025.

Various financial literacy activities have been carried out such as access to formal financing, saving money campaigns, media trainings, financial education comic books, short educational videos competition, monthly talk shows, provincial workshops, which are amongst the other social activities on which the Banks/FIs have been laying emphasis.

ABC, CMA and the Cambodian Association of Finance & Technology (CAFT) officially launched the revised Banking & Financial Institutions Code of Conduct (the “Code”) and the updated Lending Guidelines on Mar. 4, 2022, after a first trial period of six months.

The Code sets minimum standards, inspired by international good practices, to be observed by all members, with the objectives to provide financial services with transparency, responsibility, and professional ethics, fair and free competition — aiming for the banking system to grow strongly and inclusively, and for the economy to grow sustainably, therefore, contributing to the reduction of national poverty.

During the COVID pandemic, Banks/FIs have helped relieving the borrowers’ burden by providing loan restructurings to 627,524 accounts with a total portfolio amounting US$7.38 billion as of March 2022.

“We acknowledge that isolated cases of misconduct or breach could always happen. We welcome constructive criticism and are calling for all interested parties to bring to our notice any such cases, and where materialised, disciplinary measures will be taken with fairness, diligence and independence. We will take the perspectives of our clients into consideration,” read the joint statement.

The ABC and CMA will continue to conduct impartial inquiries and ensure redress to affected parties whilst taking appropriate actions against offenders.

Source: Agency Kampuchea Press