Cambodia, ADB Sign Deals to Improve Water Supply and Financial Sector Development
AKP Phnom Penh, October 31, 2019–
Cambodia’s Ministry of Economy and Finance and the Asian Development Bank (ADB) have signed two agreements worth US$89 million that will boost rural areas’ access to water supply and sanitation services and improve the country’s financial sector development efforts.
Cambodian Deputy Prime Minister and Minister for Economy and Finance H.E. Aun Pornmoniroth and ADB Country Director for Cambodia Ms. Sunniya Durrani-Jamal signed the agreements for the Third Rural Water Supply and Sanitation Services Sector Development Programme and the Inclusive Financial Sector Development Programme (Subprogramme 2) at a ceremony held here yesterday afternoon.
“The two programmes support all four priority areas of the Rectangular Strategy IV, which are human resource development through the improvement of public health care and nutrition; economic diversification by promoting financial and banking sector development; private sector development and employment by supporting small and medium-sized enterprises (SMEs); and inclusive and sustainable development through the promotion of agricultural and rural development,” said Ms. Durrani-Jamal.
Over 400,000 people will benefit from the Third Rural Water Supply and Sanitation Services Sector Development Programme, approved by ADB in September 2019, through the construction and rehabilitation of 2,500 water supply and sanitation facilities, as well as the implementation of awareness campaigns in at least 400 villages across 10 Cambodian provinces.
Sustainable and reliable water supply and sanitation services remain scarce in Cambodia’s rural areas, where about 77 percent of the country’s total population of 16.4 million live. In 2017, while 73 percent of rural households had access to improved water supply, only 11 percent of those had piped water supply. Meanwhile, 56 percent of rural residents had access to improved sanitation, and about 41 percent of rural residents still practice open defecation, which can cause diarrhea and other public health problems.
Subprogramme 2 of the Inclusive Financial Sector Development Programme, approved by ADB in September 2019, supports the Government of Cambodia’s efforts to develop an efficient and stable financial sector that promotes greater financial inclusion and sustainable development. Key interventions include improving access to finance, particularly for the poor, rural households, and SMEs. The programme will also enhance the stability of Cambodia’s financial sector and upgrade financial infrastructure to support the introduction of new financial services and products.
Cambodia’s financial sector is in its early stages of development and is dominated by the banking and microfinance subsectors. While much has been achieved, access to finance remains limited, especially in rural areas. Almost one-third of the population is completely excluded, having no access to any form of financial services. Efforts to improve access to finance have been constrained by low levels of financial literacy.
By Khan Sophirom