PHNOM PENH, Feb. 5 (Xinhua) -- The Cambodia Microfinance Association (CMA) has partnered with the National Bank of Cambodia (NBC) and the United Nations (UN) to protect borrowers and improve lending practices, said a CMA's press release on Wednesday.

The partnership aimed at addressing key challenges within Cambodia's microfinance sector, including over-indebtedness, land-related financial risks, and consumer protection, the press release said.

"This initiative, now in its active phase, engages over one hundred stakeholders from government bodies, civil society, financial institutions, and development partners to enhance lending practices and ensure the sector's long-term sustainability," it said.

CMA's Chairwoman Dith Nita said the CMA is committed to collaborating with both national and international partners to safeguard vulnerable populations and maintain microfinance as a valuable tool for economic empowerment.

"We recognize the challenges borrowers face and are actively working to improve lending practices and strengthen consumer protections," she said.

"Our efforts aim to empower borrowers to make informed decisions while safeguarding their rights," she added.

In partnership with the NBC and the UN, the CMA is supporting reforms to ensure that loans are granted based on a borrower's ability to repay, rather than relying solely on collateral, the press release said.

It added that a key measure involves prohibiting the use of Indigenous Communal Land Titles (ICLTs) as collateral, thereby protecting vulnerable communities from the risk of land loss.

"Our goal is to equip borrowers with the tools needed to succeed financially while protecting them from financial risks," Nita said.

These efforts align with the UN Sustainable Development Goals (SDGs), particularly in the areas of poverty reduction, gender equality, and financial inclusion, ensuring that Cambodia's microfinance sector remains a powerful engine of economic growth and opportunity, she added.

The Southeast Asian country has approximately 87 microfinance institutions and 115 rural credit institutions, according to the NBC. Enditem

Related

Go to Forum >>0 Comment(s)