Includes how major projects are financed and gives examples where relevant. Explains activities of the multilateral development banks in and other aid-funded projects where procurement is open to U.S. bidders.

Trade and investment financing is available through most foreign bank branches and local banks.  There is a large but unmet demand for loans to local small and medium enterprises (SMEs).  Most loans are short term and provide working capital to traders. The weighted average annual interest rate on fixed deposits in U.S. dollars (12 months term) remained around 4.8 percent in 2018.  The weighted average annual interest rate on loans in U.S. dollars (for 1 to 5 years) was approximately 11.6 percent in 2018, compared to 11.7 percent in 2017.  For the private sector to access commercial loans for private projects, collateral or other forms of guarantees are required.  Through financial leasing, small and medium investment projects can get capital lease assets from leasing firms.

In June 2009, President Obama determined that Cambodia was no longer a Marxist-Leninist economy, as defined under section 2(b)(2B)(i) of the Export-Import Bank Act of 1945, removing the long-standing determination that had prohibited the Export-Import Bank of the United States (Ex-Im Bank) from providing financing in Cambodia.  Ex-Im Bank now offers financing for the purchase of U.S. exports for private-sector buyers in Cambodia for the short-term (repayment up to one year) and the medium-term (repayment from one to seven years).  Ex-Im Bank’s support is typically limited to transactions with a commercial bank functioning as an obligor or guarantor.   Ex-Im Bank’s first trade financing deal in Cambodia took place May 2018, involving rice miller Amru Rice, financing around $345,000.

Additionally, Cambodia is eligible for the Quick Cover Program under which the Overseas Private Investment Corporation (OPIC) offers financing and political risk insurance coverage for projects on an expedited basis.

Cambodia became a member of the World Bank in 1970 and began borrowing in 1993.  The World Bank has a country office in Phnom Penh and has provided loans since 1994 in a variety of sectors with energy, road rehabilitation, education, governance and public-sector reform, trade and poverty reduction, disease control and health, and social fund projects constituting the largest shares.  Cambodia is a member of the Multilateral Investment Guarantee Agency (MIGA) of the World Bank, which offers political-risk insurance to foreign investors.  The International Monetary Fund (IMF) and other banks, such as the Japan Bank for International Cooperation (JBIC), have also provided loans to finance the government’s Public Investment Programs.   Since joining the Asian Development Bank (ADB) in 1966, Cambodia has received $2.65 billion in loans, grants, and technical assistance, with an emphasis on infrastructure, including roads, railroads, and irrigation; the energy and power sectors; private-sector development; health; and education.  The U.S. government maintains a commercial liaison office at ADB headquarters in Manila, which reports directly to the Office of Multilateral Development Banks at the U.S. Department of Commerce in Washington.  It assists U.S. companies in bidding on contracts and activities funded by the ADB.  The Bank of China’s Cambodia office was established in 2010.  By the end of December 2018, the Bank of China’s total assets in Cambodia reached $1,121 million (4,485,446 million riel); deposits and loans were $734 million and $490 million, respectively.
 

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