PHNOM PENH, Cambodia, June 16, 2025 /PRNewswire/ -- Cambodia's financial sector is undergoing a quiet yet powerful transformation—one that centers on sustainability, responsibility, and community empowerment. From commercial banks to microfinance institutions (MFIs), Cambodian financial service providers are increasingly embracing ethical lending practices, environmental, social, and governance (ESG)-aligned financing, and inclusive economic development that benefits both people and the planet.
Cambodia's financial institutions are embracing Environmental, Social, and Governance (ESG) principles to promote sustainable and inclusive finance
The momentum began in 2019 when the Association of Banks in Cambodia (ABC), with support from the National Bank of Cambodia (NBC) and the Ministry of Environment, introduced the Cambodian Sustainable Finance Principles (CSFP). These voluntary guidelines help financial institutions incorporate environmental, social, and governance considerations into their lending practices. The ESG factors are no longer mere buzzwords. A key milestone was the creation of the Sustainable Finance Principles, which encouraged banks to consider environmental and social factors in business decisions, including lending. The number of adopters increased from 48 to 74 members in 2024, including 57 commercial banks, 8 specialized banks, 6 representative offices, the Cambodia Microfinance Association (CMA), the Cambodian Association of Finance and Technology (CAFT), one Microfinance Deposit-Taking Institution (MDI) and a Credit Guarantee Corporation of Cambodia (CGCC). They are committing to more rigorous risk assessments concerning climate, governance, and social impacts.
"As responsible providers, we are committed to ensuring financial access while contributing positively to the well-being of the population, always upholding the principles of transparency, fairness, and social responsibility," said ABC Chairman Mr. Rath Sophoan.
Commercial banks have demonstrated their leadership in various areas of responsible finance. ACLEDA Bank has incorporated ESG risk factors into its credit assessments and publishes annual sustainability reports focused on financial inclusion, environmental protection, and customer protection. Canadia Bank, has prioritized digital transformation while promoting community-oriented banking practices. Maybank Cambodia, through its Cashville Kidz program, continues to enhance financial literacy among young people in partnership with local schools and NGOs, while advancing the sustainability agenda. Meanwhile, ABA Bank has launched targeted campaigns to improve financial education in rural communities, helping Cambodians build long-term financial security.
In parallel, MFIs under the CMA have shown equal dedication to advancing responsible finance. AMK Microfinance, for instance, serves approximately 300,000 loan clients—96% of whom are in rural areas and 79% of whom are women. LOLC Cambodia, one of the country's largest MFIs, recently earned the Stakeholder-Verified Orange Seal award for its commitment to gender equality and environmental sustainability, and is preparing to issue a USD 50 million sustainability bond to fund green and social initiatives. Amret Microfinance Institutions stands at the forefront of Cambodia's microfinance sector, contributing to the development of the Cambodian economy through supporting micro and small farmers and businesses, especially in rural areas, with tailored and responsible financial services.
To improve access to capital and support small businesses, CMA recently entered a three-year partnership with CGCC This agreement enables MFIs to extend more credit to Micro, Small and Medium Enterprises (MSMEs), particularly women entrepreneurs and those in rural areas, by offering credit guarantees and financial literacy training. Complementing this, commercial banks such as Prince Bank, which was awarded "Best Bank for SMEs in Cambodia 2024" by Euromoney, and Cambodia Post Bank, have developed SME-specific lending products and business guidance tools tailored to Cambodia's growing entrepreneurial base.
At the national level, under high level Multi-Stakeholder Consultation co-chaired by NBC and United Nations on Microfinance in Cambodia, has identified a number of key issues along with the proposed solutions & initiatives to uplift client protection and to strengthen responsible lending practices in Cambodia's banking and financial services sector. Significant progress has been made in enhancing responsible lending standards. This includes enforcing the implementation of the Code of Conduct and adopting the consumer protection harmonization assessment tools, with a select number of banking and financial institutions (BFIs) to undergo the assessment by the 3rd party assessor.
At the community level, both banks and MFIs have launched major financial education campaigns. Since 2020, ABC and CMA members have been actively driving monthly digital financial literacy campaigns—supercharging their impact with a dynamic weekly rollout starting in 2023. ABC and CMA's "Safe Finance" program, supported by NBC and various financial institutions, is distributing educational materials across communes and villages to raise awareness of borrower rights and financial safety.
"Digital payments and inclusive finance are transforming lives in Cambodia, especially in underserved areas. By promoting access and accountability, we are building a more inclusive economy that empowers individuals and protects communities," said Ms. Dith Nita, Chairwoman of the Cambodia Microfinance Association.
The National Financial Inclusion Strategy 2019–2025 provides the broader framework for this transformation, aiming to integrate more Cambodians—especially women, farmers, and rural families—into the formal financial system. Complementing this is the Sustainable Finance Roadmap, which helps financial institutions align with national climate goals and global development targets.
Additionally, the Financial Consumer Center—co-led by ABC and CMA—now provides a dedicated avenue for resolving borrower disputes and improving trust in the financial system. This mechanism supports the enforcement of Cambodia's Lending Guidelines and the sector-wide Code of Conduct, which prohibit unethical lending practices and promote client welfare.
Together, Cambodia's banks and MFIs are not only financing growth but doing so responsibly. Whether it's investing in ESG-aligned infrastructure, providing affordable credit to rural entrepreneurs, or ensuring every borrower understands their rights, the sector is proving that responsible finance is not just possible in emerging economies—it's essential.
As global investors increasingly prioritize transparency, sustainability, and long-term impact, Cambodia's financial sector is steadily emerging as a model for Southeast Asia.
About ABC
The Association of Banks in Cambodia was formed in 1994 and is recognized by the Royal Government as the official organization to represent the country's private banking sector. Our purpose is to promote constructive dialogue amongst member banks, and to serve as an industry voice to the public and the Government.
About CMA
The Cambodia Microfinance Association is an NGO and professional association that aims to ensure the prosperity and sustainability of the microfinance sector in Cambodia. CMA plays a vital role in creating local and international networks as well as seeking equity and loan funds, new technologies and overseeing conflict resolution between microfinance operators. All of these activities have led each member microfinance institution to become stronger and more successful and thereby attract support from the international market to enable industry expansion.
