The Asian Development Bank (ADB) on Tuesday signed up to lend Cambodia 15 million U.S. dollars to promote reforms of the country's finance sector.
The agreement was signed between Cambodia's Deputy Prime Minister Keat Chhon, Minister of Economy and Finance, and Peter Brimble, ADB senior country economist for Cambodia.
The loan will be used to fund the subprogram I of the Financial Sector Program III (FSP III) whose key activities include improving regulatory frameworks and supervision of banks and microfinance institutions to better support a fast-changing domestic market and developing interbank transactions, said the ADB's press release on Tuesday.
It is also meant to help modernize payments, clearance and settlement system, to update business registration system, to widen consumer access to credit and strengthen legal frameworks for development of securities market.
In addition, the program promotes transparency among finance institutions and measures to combat money laundering and the financing of terrorism.
"The program will help develop a sound, market-based finance sector to be able to enhance resource mobilization and support sustainable and inclusive economic growth," said Peter Brimble.
FSP III comprises a series of three single-tranche subprograms implemented in December 2010 and runs to December 2013.
Attached to the loan, the ADB also approved the provision of a technical assistance grant worth 1.1 million U.S. dollars for Regional Trade and Financial Security Initiative to strengthen the capacity of the National Bank of Cambodia, the Ministry of Economy and Finance, the Ministry of Commerce, and the Securities and Exchange Commission of Cambodia.
The loan of 15 million U.S. dollars has a 24-year term, including an 8-year grace period with an interest rate of 1 percent and 1.5 percent for the balance term.