Building Financial Institutions in Cambodia


During the decades of civil war in Cambodia in the late 1970s, nearly all economic activities were suspended, currency was outlawed, banking systems were abolished, and people were forced to rely on barter system. After the fall of the Khmer Rouge, the Cambodian society reverted back to a society based on money. But even though the central bank was re-established within a year, it took much longer for confidence in the banking system to be restored.


With the support of the Government of Japan, Cambodia and the IMF have worked together to rebuild the country’s financial sector and gain financial stability. An IMF resident expert went to Cambodia in 2004 to advise the country’s National Bank, helping the government create laws to regulate and supervise the banking system. The country also made progress in mitigating risks and vulnerabilities to its financial system by developing risk-based supervision frameworks and strengthening prudential regulations for its banks.


These reforms contributed to renewed confidence in the overall banking system, and more concretely — they provided business owners and general customers better access to credit and other financial services. Additional reforms to make financial system supervision more forward-looking and comprehensive have been underway. Further expansion of financial services to rural areas will ultimately help raise living standards throughout the country.

As the Cambodian banking system developed, it played a large role in financing key sectors of the economy. For the past decade, the Cambodian economy has experienced healthy growth, led by textile and garment, agriculture, construction, and tourism sectors. The country also benefits from foreign investment and thriving international trade.