|Project Name||Financial Sector Development Program II|
|Project Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|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|
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.
|Description of Outcome|
|Progress Toward Outcome|
|Description of Project Outputs|
|Status of Implementation Progress (Outputs, Activities, and Issues)|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Consulting Services||Consulting Services yet to be determined.|
|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|
|Concept Clearance||21 Mar 2006|
|Fact Finding||17 May 2006 to 26 May 2006|
|Approval||08 Sep 2006|
|Last Review Mission||-|
|PDS Creation Date||18 Apr 2006|
|Last PDS Update||16 Oct 2008|
|Approval||Signing Date||Effectivity Date||Closing|
|08 Sep 2006||05 Oct 2006||05 Oct 2006||31 Aug 2007||30 Sep 2008||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|650,000.00||0.00||0.00||0.00||0.00||0.00||650,000.00||08 Sep 2006||487,891.61|