National Financial Inclusion Strategy 2019‐2025.

This National Financial Inclusion Strategy 2019‐2025 is a sectoral policy document. It proposes a policy target, which offers the objective of enhancing financial inclusion as follows: Increase access to quality formal financial services, reduce the financial exclusion of women by half from 27% to 13%, and increase usage of formal financial services from 59% to 70% by 2025 as well as improve household welfare and support economic growth.
According to the policy document, financial inclusion has become instrumental to addressing country’s economic growth, reducing inequality, and decreasing the overall national poverty rates. Elimination of blockages to financial inclusion has significant direct impacts on the productivity and GDP growth through smarter allocation of resources and more efficient financial contracting; resulting in stronger entrepreneurial activities and new business start‐ups. This National Financial Inclusion Strategy was prepared as the national policy framework, which allows ministries and related stakeholders to be fully involved and to have comprehensive and precise action plans. The National Financial Inclusion Strategy is a policy tool to support the effective implementation of Financial Sector Development Strategy 2016‐2025 (FSDS), which aims at achieving stable and effective financial system as well as diversified inclusive financial market to address the domestic demand for financial services, support the sustainability of economic growth, increase people’s incomes and reduce poverty.
The policy document indicate that the key barrier to financial inclusion is the low level of financial awareness and literacy in the country. The ability to engage with information on financial services is an important precursor to effective usage of financial services. There are gaps in terms of access to rural areas such as commune and village levels and restricted practices followed by these institutions in terms of the services offered. In order to encourage usage, financial products need to be further customised to address the target segment’s socio‐economic status and needs. This gap has led the population not being served by the formal institutions to use informal channels or otherwise remaining unserved. The Strategy has identified the following priority activities: 1. Encourage savings in formal financial institutions, 2. Promote innovative credit products for SMEs, 3. Enable the expansion of payment system capabilities, 4. Improve broader access to insurance, 5. Strengthen the capacity of the financial sector regulators, and 6. Increase consumer empowerment and protection, and financial sector transparency. Based on the Strategy’s priority activities, action plans have been drawn to propose shortterm, medium‐term, and long‐term activities, which will cover the critical aspects of financial inclusion in Cambodia.