FINANCIAL INCLUSION, NOT EXPLOITATION: THE UN'S PUSH FOR ETHICAL MICROFINANCE

Recognizing the urgent need for reform, the UN Resident Coordinator, in collaboration with the National Bank of Cambodia (NBC), has convened a structured dialogue bringing together government agencies, financial institutions, investors, civil society organizations, and development partners.

In November 2023, the NBC-UN Convening Multi-Stakeholder Consultation Process on Microfinance in Cambodia was launched—the first initiative of its kind. This neutral platform has engaged over 100 institutions in technical discussions, stakeholder dialogues, and high-level consultations to address the risks of unsustainable lending. The process has led to the adoption of 22 priority actions aimed at strengthening consumer protection, responsible lending, legal safeguards, and financial safety nets for rural borrowers. The UN's role in convening diverse actors has been instrumental in fostering transparency, accountability, and collaboration. 

UN Resident Coordinator Jo Scheuer emphasized: "The UN facilitates discussions, ensuring inclusive dialogue among stakeholders, but the progress of this initiative ultimately depends on the active participation and commitment of all involved."

While encouraging steps have been taken, the path ahead remains complex. Within six months, four priority actions have been fully implemented, 15 are progressing, and three are in the early stages. Sustained coordination, follow-up, and high-quality technical advisory support will be essential to ensure that reforms lead to lasting impact. The initiative has the potential to mitigate risks of over-indebtedness and to position Cambodia's financial sector as a model for responsible microfinance governance in the region.

By fostering inclusivity and collective action, the UN in Cambodia is supporting systemic change and financial services that empower individuals while safeguarding economic stability. This initiative sets a precedent for sustainable microfinance and reinforces the UN's commitment to equitable development and responsible financial inclusion.

THE UN IN CAMBODIA IS DRIVING RESPONSIBLE MICROFINANCE REFORM THROUGH MULTI-STAKEHOLDER DIALOGUE, ENSURING CONSUMER PROTECTION, FINANCIAL STABILITY, AND SUSTAINABLE ECONOMIC GROWTH.