National Bank of Cambodia

ForewordIn 2011, many developed and emerging economies wereaffected by a series of crises, including severe public debtcrisis in European regions, high unemployment rate, and lowpublic confidence, while recovery from natural disaster is still in progress.According to the International Monetary Fund (IMF), the global economicgrowth in 2011 is 4% , a drop of 1.1% as compared to 2010.Cambodia managed to make a satisfactory progress in its development andstabilized its macroeconomic condition despite the impacts of the globaleconomic crises and, especially, flood that affected some parts of the country in2011. With the National Bank of Cambodia’s efforts in improving access tofinance, banking intermediation showed noticeable improvement as reflected inthe increasing numbers of banks and their branch networks over the last year.The performance of banking institutions was satisfactory in 2011. The capital baseof banking sector was strengthened through the injection of paid-up capital frombanks, while liquidity was maintained over the regulatory requirement. Inaddition, assets and profitability of banking institutions displayed a trend ofgradual increment since 2009. Furthermore, micro-finance institutions (MFIs)continue to play significant roles in improving access to finance in the rural areaand contribute to the economic growth. In 2011, total lending by MFIs increasedby approximately 50%, while saving in microfinance deposit taking institutions(MDIs) tripled compared to 2010.As Cambodian financial sector is still at its early stage of development, there issignificant room for improvement both at the industry level as well as at theregulatory and supervisory level. The Royal Government of Cambodia under theleadership of Samdech Akka Moha Senapadei Techo Hun Sen, developed in theyear 2000, Cambodia’s first financial sector blueprint to serve as a 10-years planand guidance for important infrastructure, capacity and legal and regulatorydevelopment in the financial sector in the country. Since then, the Blueprint hasbeen updated to reflect the changes in domestic as well as global financialsystem landscape. In 2011, the National Bank of Cambodia, Ministry of Economicand Finance, and other relevant ministries and authorities reviewed anddiscussed the Financial Sector Development plan 2011-2020. The updatedblueprint is expected to be launched in 2012.-i-