Policy Note

Microfinance and Household Welfare : Cambodia Policy Note

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collection.link.214
https://openknowledge.worldbank.org/handle/10986/11872
collection.name.214
Policy Notes
dc.contributor.author
Pimhidzai, Obert
dc.contributor.author
Tong, Kimsun
dc.contributor.author
Anantavrasilpa, Ratchada
dc.contributor.author
Popovic, Andrej
dc.contributor.author
Mel, Sokim
dc.contributor.author
Sanchez Martin, Miguel Eduardo
dc.date.accessioned
2019-03-18T19:24:58Z
dc.date.available
2019-03-18T19:24:58Z
dc.date.issued
2019-02-28
dc.date.lastModified
2019-03-20T14:29:37Z
dc.description.abstract
Cambodia's openness to trade and financial flows has fueled one of the fastest credit growth episodes in Asia.A remarkable expansion in formal microfinance lenders contributed to increased access to credit. Since the promulgation of the National Strategy for Microfinance in 2007, Cambodia’s microfinance sector has expanded rapidly, with both assets and credit growing at annualized rates of over 40 percent. While access to credit has helped ease financial constraints for households, one key concern is how the cost of credit and increased exposure to risk might affect household welfare. At the household level, low financial literacy could result in poor borrowing decisions and heighten risks. There are concerns that households may be over-borrowing and increasing their exposure to risks, as there are signs that the market is already highly saturated, given estimated absorption capacity at this level of development. This policy note assesses the impact of access to credit on household welfare in Cambodia and providesevidence on the drivers of the cost of credit in the microfinances sector. To fill the existing knowledge gaps, this policy note uses the latest available data from official sources to provide evidence on (i) the impact of microcredit on household welfare, (ii) profitability and cost of credit in the microfinance sector, and (iii) the effects of the interest rate cap in the sector. This note ultimately presents a series of policy options aimed at facilitating affordability and reducing the cost of credit, while maintaining sector profitability and minimizing risks (both for households and the financial system). The policy options have been developed in consultation with sector stakeholders.
en
dc.identifier
http://documents.worldbank.org/curated/en/144661552916327946/Microfinance-and-household-welfare-Cambodia-policy-note
dc.identifier.uri
http://hdl.handle.net/10986/31418
dc.language
English
dc.publisher
World Bank, Washington, DC
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo
dc.subject
MICROFINANCE
dc.subject
HOUSEHOLD WELFARE
dc.subject
ACCESS TO FINANCE
dc.subject
COST OF CREDIT
dc.subject
CONSUMER PROTECTION
dc.subject
SMALL AND MEDIUM ENTERPRISES
dc.subject
SME FINANCE
dc.subject
MOBILE BANKING
dc.title
Microfinance and Household Welfare
en
dc.title.subtitle
Cambodia Policy Note
en
dc.type
Policy Note
en
okr.date.disclosure
2019-03-18
okr.doctype
Economic & Sector Work
okr.doctype
Economic & Sector Work :: Policy Note
okr.docurl
http://documents.worldbank.org/curated/en/144661552916327946/Microfinance-and-household-welfare-Cambodia-policy-note
okr.googlescholar.linkpresent
yes
okr.identifier.externaldocumentum
090224b086a979c8_2_0
okr.identifier.internaldocumentum
30216915
okr.identifier.report
128266
okr.imported
true
en
okr.language.supported
en
okr.pdfurl
http://documents.worldbank.org/curated/en/144661552916327946/pdf/128266-REVISED-WP-PUBLIC-Nota-MFI-web.pdf
en
okr.region.administrative
East Asia and Pacific
okr.region.country
Cambodia
okr.topic
Finance and Financial Sector Development :: Access to Finance
okr.topic
Finance and Financial Sector Development :: Microfinance
okr.topic
Rural Development :: Rural Microfinance and SMEs
okr.unit
East Asia and Pacific 1 (GMTP1)

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