The Cambodia Microfinance Association (CMA) is demonstrating its dedication to sustainable finance by providing comprehensive in-person training to its staff and management team, aimed at enhancing their capacity in green finance.
The training, conducted on 27 May 2025, as part of the Climate Resilience for All (CREFA) project—funded by the Irish Embassy through Oxfam in Cambodia—equipped participants with foundational knowledge of green finance. Key objectives included understanding core concepts and their relevance to microfinance, identifying opportunities for integrating green finance into CMA's operations, and understanding green business operating models.
Furthermore, the training facilitated advanced discussions for CMA's management on green instruments and strategic implementation, aligning CMA's operations with sustainable finance frameworks. It provided a platform to explore green financial taxonomies and regulatory frameworks, delve into global and national green finance trends and policies, comprehend key components, stakeholder roles and responsibilities, and discuss risk management and incentives for green lending.
Sustainable finance, often used interchangeably with "Green finance," involves investment decisions that consider both financial returns and environmental, social, and governance (ESG) factors. Its primary goal is to increase financial flows (from banking, micro-credit, insurance, and investment) from public, private, and not-for-profit sectors towards sustainable development priorities. A crucial aspect of this is to enhance the management of environmental and social risks, capitalize on opportunities that offer both a decent rate of return and environmental benefits, and ensure greater accountability.
According to the World Bank's Cambodia Country Climate and Development Report (CCDR), released in October 2023, Cambodia is already significantly affected by climate change, underscoring an urgent need for adaptation to its visible impacts. Increased variability in rainfall patterns is leading to more frequent droughts and more frequent and intense floods. For instance, a severe drought in 2015–2016 impacted over 2.5 million people across 18 of 25 provinces. Rice production losses due to droughts associated with the 2019 El Nino were estimated at $100 million. In September 2022, the heaviest rainfall in three years caused severe flooding in 14 provinces, affecting approximately 85,000 households, and leading to the evacuation of 5,000 households due to landslides.
Climate projections indicate that future flood risk and heat stress will worsen in Cambodia. Without appropriate adaptation and mitigation measures, climate change could result in a loss of up to 9% of Cambodia’s GDP by 2050 and increase the poverty rate by up to 6 percentage points by 2040, as highlighted in the report.
To reduce Cambodians' vulnerability to climate change through targeted activities, ultimately increasing the resilience of Cambodian systems and individuals, CREFA, a year-long project spearheaded by Oxfam in Cambodia, was created. The project is involving a consortium of nine organizations specializing in climate-smart agriculture, renewable energy, climate resilience, and policy dialogue. This project seeks to convert climate change risks into opportunities for sustainable development through effective and efficient adaptation and mitigation responses.
As an implementing partner in this project, CMA is responsible for raising awareness and building capacity for the development and assisting in design of green products. This includes conducting research and market intelligence, assisting financial institutions (BFIs) in piloting green finance lending, and engaging BFIs through workshops and conferences with green investors.
Since the project's inception in March 2024, CMA has conducted workshops on various green finance topics, including "The Role of Green Finance to Promote Sustainable Financial Inclusion in Cambodia" and a study on developing a Green Finance Instrument for the Microfinance Sector. These initiatives aim to build the capacity of and engage the Association's member BFIs in this sector. To date, over 20 BFIs have participated in this project, with the ultimate goal of seeing green products readily available in the sector to contribute to climate change reduction.
For the next phase of the project, CMA is expected to provide capacity building to BFIs for accessing Green Funds, assist BFIs in developing and customizing green products for their specific institutions, and support BFIs in delivering green finance training to their staff.
In January 2025, the National Bank of Cambodia (NBC) held extensive discussions with the Inter-Ministerial Green Finance Working Group. The objective was to formulate policies, strategies, initiatives, and mechanisms in consultation with relevant ministries to support green financing and accelerate green investment activities across Cambodia. The meeting was attended by the NBC Deputy Governor, Secretaries of State, Undersecretaries of State, and representatives from 12 relevant ministries and institutions.
Quoting NBC Governor Chea Serey who presided over the meeting, Khmer Times reported that, “Cambodia requires about $8 billion to fund the green economy. This is a significant budget that necessitates the participation of all stakeholders, including the government, private sector, development partners, and philanthropists.” “Therefore, Cambodia needs a clear vision and strategy to mobilize the required funds,” she added.
According to Global Market Insights, the global sustainable finance market size was valued at USD 5.87 trillion in 2024 and is projected to grow at a CAGR of 19.8% between 2025 and 2034, reaching USD 35.72 trillion.
