PHNOM PENH: The Association of Banks in Cambodia (ABC) and Cambodia Microfinance Association (CMA) have launched the Industry-wide Standard Loan Contract and Standard Text of the Contractual Terms for use in Cambodia's banks and financial institutions aimed to enhance transparency, effectiveness, and consumer protection.

The launching ceremony was held on Aug. 29 in the presence of H.E. Dr. Chea Serey, Governor of the National Bank of Cambodia (NBC), Mr. Rath Sophoan, Vice-Chairman of the ABC, Mr. Sok Voeun, Chairman of CMA, Mr. Nget Chek, Deputy Director General of Consumer Protection Competition and Fraud Repression Directorate-General (CCF), bankers and other stakeholders.

The Standard Loan Contract and Standard Text of Contractual Terms allow all members to have a unified standard loan agreement and standard text of contractual terms in their respective financial institutions' loan contracts when banks and financial institutions communicate and provide loans to the public and their clients.

This guideline will be applied to commercial banks, specialized banks, microfinance deposit-taking institutions, microfinance institutions, rural lending institutions, and financial leasing companies.

Addressing 300 participants during the launching ceremony, H.E. Dr. Chea Serey said the Standard Loan Contract and Standard Text of Contractual Terms for Banks and Financial Institutions is a contribution to the implementation of the first phase of the 7th-mandate Royal Government's Pentagonal Strategy.

“This is another new achievement in contributing to consumer protection as well as financial inclusion in Cambodia,” she stressed.

The Standard Loan Contract, which demonstrates the contribution of the NBC as well as the Royal Government in supporting consumer protection, as well as strengthening financial inclusion in Cambodia, is reflected through the provision of a responsible manner, and ethical competition, she added.

Mr. Rath Sophoan, ABC Vice Chairman, said that this Standard Loan Contract will contribute to promoting transparent competition, improving customer protection, and contributing to the development of the banking and financial sector in Cambodia in a stable, sustainable, and inclusive manner.

“The achievements of the collaboration between all members and the support of the NBC will contribute to the development of the banking system and increase the trust of the people, investors, and stakeholders in the banking system,” continued Mr. Sophoan.

Mr. Sok Voeun, Chairman of CMA's Board of Directors, said that the Standard Loan Contract and Standard Text of the Contractual Terms are essential for both customers and all banking and financial institutions because they will help maintain sustainability for the banking and financial sector as a whole.

“This is a minimum standard that is jointly implemented and can help to keep the sustainability of the sector,” he said.

Cambodia has 59 commercial banks, nine specialized banks, and 87 microfinance institutions across the country, with 16.5 million deposit accounts and 3.8 million credit accounts, according to an NBC report.

Outstanding loans rose by 13.8 percent year-on-year to US$58.6 billion by June this year, while customers' deposits increased by 6.4 percent to US$44.4 billion dollars.