Cambodia: Inclusive Financial Sector Development Program, Subprogram 1

Sovereign Project | 44263-013 Status: Proposed

Summary

Based on successful implementation of the past and ongoing ADB Financial Sector Programs (FSP I, II, and III), with effective and flexible ways of converting complex policy objectives into implementable policy actions, the government requested continuing ADB support to the finance sector through a policy-based loan. 2 The proposed programmatic approach for a total of $30 million equivalent from the Asian Development Fund (ADF), which will comprise two subprograms, is included in the country operations business plan (COBP), 2013 2015. It will be designed within the framework of the Financial Sector Development Strategy (FSDS), 2011 2020 updated under the FSP III.

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Project Name Inclusive Financial Sector Development Program, Subprogram 1
Project Number 44263-013
Country Cambodia
Project Status Proposed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan: Financial Sector Program Cluster 4, Subprogram 1
Asian Development Fund US$ 40.00 million
TA: Financial Inclusion and Private Sector Development Program (formerly: Fourth Financial Sector Program, Subprogram 1)
Financial Sector Development Partnership Special Fund US$ 1.10 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Sector / Subsector

Finance - Finance sector development

Gender Equity and Mainstreaming Some gender elements
Description Based on successful implementation of the past and ongoing ADB Financial Sector Programs (FSP I, II, and III), with effective and flexible ways of converting complex policy objectives into implementable policy actions, the government requested continuing ADB support to the finance sector through a policy-based loan. 2 The proposed programmatic approach for a total of $30 million equivalent from the Asian Development Fund (ADF), which will comprise two subprograms, is included in the country operations business plan (COBP), 2013 2015. It will be designed within the framework of the Financial Sector Development Strategy (FSDS), 2011 2020 updated under the FSP III.
Project Rationale and Linkage to Country/Regional Strategy

As the financial sector expands its scope and moves toward a sound market-oriented system, the proposed program will build on the established relationship with government counterparts and ensure the momentum will not be lost on reforms completed under the FSP I, II, and III. A total of $30 million equivalent from ADB's Special Funds resources is programmed for the Fourth Financial Sector Program (FSP IV). The size of the budget support program is based on (i) development financing needs for the sector as identified during country programming and strategy formulation, (ii) the importance the government attaches to the reform program, and (iii) the estimated costs of designing and implementing the medium-term reform program minus estimated financial support provided by other development partners.

On the basis of ongoing dialogue with the government, as well as guidance received from ADB's Board of Directors and management during the previous programs, the FSP IV will increasingly focus on (i) improved access to finance, especially outreach in rural areas, with diversified financial services through microfinance and microinsurance; and (ii) improved transparency and governance in the financial sector, including anti-money-laundering and/ combatting the financing of terrorism (AML and CFT) measures and legal and information infrastructures. The FSP IV will also track progress on the development of nascent financial services, including capital markets, financial leasing with improved legal foundation and infrastructures, and emerging pension schemes such as contractual savings

Impact Improved access to finance for sustainability
Outcome A growing, resilient, and efficient financial system with expanded coverage
Outputs

Enhanced financial sector stability through upgrading the supervisory capacities and emerging financial services

Improved legal foundation and infrastructure through the measures to reduce transaction and information costs

Improved governance and transparency through the promotion of AML and /CFT measures , alternative dispute resolution, and International Financial Reporting Standards

Geographical Location

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 PPTA for Fourth Financial Sector Program has been approved in November 2013. Because of the delay of the implementation of on-going Third Financial Sector Program (extended to June 2014), the implmentation of PPTA for Fourth Financial Sector Program has been postponed accordingly. The Mission will initiate the recruiment of the consultaing firm during 2014 Q4.
During Project Implementation

Responsible Staff

Responsible ADB Officer Hiroyuki Aoki
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
National Bank of Cambodia
P.O. Box 25
22-24 Norodom Blvd.
Phnom Penh, Cambodia

Timetable

Concept Clearance -
Fact Finding 29 Mar 2016 to 06 Apr 2016
MRM 15 Jun 2016
Approval 16 Sep 2016
Last Review Mission -
Last PDS Update 15 Sep 2014

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

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Related Publications

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