Project Name Financial Sector Development Program II
Project Number 34389-012
Country Cambodia
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 4835-CAM: Financial Sector Development Program II
Japan Special Fund US$ 650,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Finance - Finance sector development
Gender Equity and Mainstreaming No gender elements
Description

The PPTA will assist in the selection of appropriate policy conditions and help build capacity within the implementing agencies so that they are better able to fulfill those conditions. The overall goal will be to support the Government in developing a sound and efficient financial system that enhances resource mobilization and contributes to sustainable economic growth. This will be pursued through:

i. Development of the banking sub-sector ? effective prudential supervision of banks and non-bank financial institutions; enhanced competition to reduce transaction costs, introduction of new products and services; extension of facilities to the rural areas.

ii. Legal and Regulatory framework ? effective implementation of laws and regulations adopted during FSPL I and the development of relevant laws and accompanying regulations necessary for the effective functioning of the financial sector.

iii. Development of the insurance sub-sector ? implementation of revised insurance law and accompanying regulations, divestment of state-owned insurance and re-insurance companies, strengthened supervisory function, and increased competition to reduce costs and introduce new products and services.

iv. Inter-bank and money markets development - implementation of approved laws and accompanying regulations for the payments system and inter-bank and money markets.

v. Further strengthening of the financial market infrastructure, including information infrastructure, accounting and auditing institutions, and commercial arbitration centers.

vi. IT project for NBC ? feasibility study and a report on the outcome of discussions with officials of the NBC project design for the IT loan.

Project Rationale and Linkage to Country/Regional Strategy

The development framework for Cambodia?s financial sector is based on the 2001-2010 Financial Sector Blueprint (Blueprint) that was developed with ADB support and adopted by the Government in late 2001. Implementation of the Blueprint to date has helped with the successful transition from a mono-banking to a two-tier (central bank and financial institutions) system. Work to update the Financial Sector Blueprint (2006-2015) was completed at the end of 2006 and officially adopted by the Government of Cambodia in February 2007.

Since implementation of the Blueprint commenced in 2001 there have been some notable achievements as well as lessons to be learned (from international and domestic experience). Those, plus new challenges now emerging, the Government would like to update the blueprint so that it may more accurately reflect the current situation. Work on the Blueprint update has commenced with technical support from ADB and it is expected that the update will be completed by the second quarter of 2006. The updated Blueprint will provide the framework for reform in the sector over the next 10 years and useful inputs for the design of the second FSPL. Against this background, Financial Sector Development has to be coordinated closely with private sector development strategies to address governance and corruption issues, problems with access to finance, high transaction costs, limited access to information and increasing competition in what should be a level playing field.

As private sector development is one of the pillars for ADB's operations in Cambodia, financial sector development is a priority sector and one in which ADB has played a leading role.

Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Cambodia
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Consulting Services yet to be determined.
Procurement tbd
Responsible ADB Officer Samiuela T. Tukuafu
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
National Bank of CambodiaMme Tal Nay Imnbc2@online.com.khNational Bank of Cambodia, 22-24 Preah Norodom Blvd, Phnom Penh
Timetable
Concept Clearance 21 Mar 2006
Fact Finding 17 May 2006 to 26 May 2006
MRM -
Approval 08 Sep 2006
Last Review Mission -
PDS Creation Date 18 Apr 2006
Last PDS Update 16 Oct 2008

TA 4835-CAM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Sep 2006 05 Oct 2006 05 Oct 2006 31 Aug 2007 30 Sep 2008 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
650,000.00 0.00 0.00 0.00 0.00 0.00 650,000.00 08 Sep 2006 487,891.61

This project data sheet was generated from http://www.adb.org/projects/34389-012/main on 01 September 2015