The strategy gave both the Cambodian government and international donors a shared vision and coordinated action plan. It helped Cambodia transition from a post-conflict restart to a rules-based, investor-friendly environment, supporting not only financial sector growth but also broader economic development.
— Cambodia —
resilience. reform. roadmap.
Charting Cambodia’s Financial Future: A Strategic Blueprint for Sectoral Reform and Resilience (2007–2017)
"In rebuilding a nation's financial future, strategy must precede structure, and trust must precede investment."
— Dr. Don Brash, Former Governor, Reserve Bank of New Zealand
Challenge
By the early 2000s, Cambodia had only just begun to emerge from decades of civil conflict, political instability, and economic isolation. The financial sector—arguably the cornerstone of any modern economy—was virtually nonexistent. The collapse of state structures had left the country with a mono-bank system inherited from its socialist era, incapable of serving a market-driven economy. In 2000, a critical reform milestone was reached when Cambodia shifted to a two-tier banking system, separating central banking from commercial activities. This foundational shift was accompanied by the deregistration of 12 non-compliant banks, leaving 19 institutions as the pillars for rebuilding confidence in the sector.
However, this reform was just the beginning. The country’s financial system remained underdeveloped, lacking depth, institutional integrity, policy direction, and the necessary infrastructure to attract meaningful domestic and foreign investment. The challenge was not merely institutional but holistic: Cambodia required a forward-looking, phased development plan for its entire financial ecosystem—banking and non-banking alike—capable of catalyzing sustainable growth, formalizing financial services, and supporting the country’s ambition to integrate into the global economy, including accession to the World Trade Organization (WTO).
The Government of Cambodia, with support from the Asian Development Bank (ADB), commissioned a strategic study to design a Financial Sector Development Strategy covering 2007 to 2017. This assignment required not only expert insight, but also trust, cultural understanding, and a nuanced appreciation of Cambodia’s fragile state-building journey.
Strategy
GG International was engaged to lead this critical consulting assignment, bringing together a team of seasoned experts, including Dr. Don Brash (former Governor of the Reserve Bank of New Zealand), A. Wilson (financial expert), M.S. Warbrick (economist and banking expert), and R. Leith (insurance and risk expert). This interdisciplinary team combined international best practice with context-specific solutions, working closely with Cambodia’s National Bank, the Ministry of Economy and Finance, and the Ministry of Commerce.
The strategy formulation process was multi-staged. First, the team conducted a comprehensive diagnostic of Cambodia’s financial sector, reviewing both supply-side infrastructure (commercial banks, insurance, microfinance, regulatory mechanisms) and demand-side dynamics (consumer behavior, informal market reliance, rural access to credit). This built on an earlier 2001 study and allowed for a comparative assessment of progress and persistent gaps over a five-year period.
Next, the team worked to identify and validate key policy gaps, institutional weaknesses, and structural challenges. The team then developed a clear and practical implementation roadmap, structured around policy triggers and reform milestones across a ten-year horizon. Key components of the strategy included:
- Strengthening banking supervision and regulatory oversight.
- Expanding financial inclusion and outreach, especially in rural areas.
- Encouraging private sector participation in financial services.
- Developing the legal and institutional framework for non-bank financial institutions, such as insurance and capital markets.
- Improving financial literacy and consumer protection.
- Positioning the financial sector to support Cambodia’s WTO commitments and global integration.
Through continuous stakeholder consultation, the team ensured national ownership of the roadmap while aligning donor contributions with defined reform priorities.
Transformation
The resulting Financial Sector Development Strategy (2007–2017) became the official guiding framework for the Royal Government of Cambodia’s financial reform agenda. More than just a policy document, it served as a national roadmap for transforming the sector into a stable, market-oriented system aligned with regional and international standards.
The strategy laid the groundwork for:
- Institutionalizing banking reforms.
- Establishing regulatory clarity for microfinance and insurance.
- Increasing transparency and accountability in the financial sector.
- Mobilizing domestic and international investments.
- Broadening financial access for underserved populations.
- Building confidence among investors and development partners.
The legacy of the project lies in its impact on policymaking and institutional capacity. Through rigorous analysis, strategic foresight, and locally anchored collaboration, GG International contributed significantly to rebuilding Cambodia’s financial architecture—providing a model of resilience, reform, and responsible planning in a fragile state context.
(FSDS) 2006-2015