The Social Performance Task Force (SPTF) and the Cambodia Microfinance Association (CMA) have a new memorandum of understanding to strengthen responsible, inclusive finance in Cambodia.
SPTF and CMA signed the agreement at an event on July 22 at the Hyatt Regency in Phnom Penh along with senior management from the National Bank of Cambodia. Financial inclusion stakeholders from around the world joined the event virtually.
“This new partnership, a first of its kind, will help chart a roadmap for responsible growth, financial stability and customer protection in Cambodia's microfinance and broader financial sector,” said Nitin Madan, the SPTF Director of Responsible Inclusive Finance Facility for Southeast Asia (RIFF-SEA). “The CMA and its members can also apply for co-financing for implementing and strengthening capacity on responsible, inclusive finance practices of financial service providers in Southeast Asia.”
The Cambodia Microfinance Association is a nonprofit sector association, with more than 120 member organizations, established to ensure that Cambodians receive formal financial services in a timely and sustainable manner. The CMA works with microfinance institutions, banks, financial leasing institutions and rural credit institutions and also engages with regulators, national and international donors, creditors, investors and other stakeholders.
The recently adopted banking and financial sector Code of Conduct led by CMA promotes the adoption of international best practices in Cambodia to reiterate the commitment of financial institutions to clients and promote a healthy reputation of the sector.
“This partnership aims to strengthen responsible inclusive practices from a risk management perspective to promote responsible growth, enhance financial stability and increase consumer protection,” said Sok Voeun, CMA Chairman. “The initiative also comes in the context of Smart Campaign phasing out, leading to the SPTF-CERISE partnership to play a more active role in that space. To this end, the partnership will also work toward the promotion and adoption of the SPTF-CERISE Client Protection Pathway and Certification on client protection.”
SPTF and CMA will focus on helping financial institutions in Cambodia learn about the SPTF’s Client Protection Pathway and the Universal Standards for Social & Environmental Performance Management.
Increasing client protection is a priority under Cambodia's National Financial Inclusion Strategy for long-term market sustainability.
“Building trust on formal financial services remains crucial to increase financial inclusion in Cambodia and ensure the stability of the whole banking system while customer protection is the priority for all stakeholders,” said Kith Sovannarith, the First Deputy Director of Bank Supervision with the National Bank of Cambodia.
“Since SPTF was founded in 2005, we have seen the power of collective action to drive effective self-governance. In many geographically and culturally diverse countries, the financial markets are healthier, and clients are protected, when providers come together to agree to codes of conduct and performance standards to which they will hold themselves and each other accountable,” said Laura Foose, SPTF Executive Director. “These efforts require both strong leadership and governmental support, so SPTF is grateful to the CMA and the National Bank of Cambodia for their commitment to our shared vision.”
Today’s agreement builds on the Cambodia Consumer Protection Framework, a collaboration between SPTF, the CMA, and ADA Microfinance.
“The framework includes a financial sector code of conduct, client protection training certifications, external assessments/audits to check and demonstrate practices, a national responsible, inclusive finance label, consumer protection and financial literacy, and coordination on relevant policies/regulations,” said Madan.
SPTF’s work in Cambodia is made possible through the generous support of the Government of Luxembourg through the Ministry of Foreign and European Affairs which funds the RIFF-SEA. SPTF’s work with CMA on the Code of Conduct also reflects our globally renowned Client Protection Pathway, for which generous funding has been provided by the Agence Française de Développement.
