Abstract

Over the past two decades microfinance has become firmly entrenched as a development solution throughout the global South, offering broad promises of poverty reduction, empowerment, rural development, and livelihood generation through access to financial services. While the sector initially focused on the extension of microcredit—small loans targeting the rural poor—the microfinance sector is now comprised of a diverse set of actors, practices, and financial products. Few countries have incorporated microfinance so rapidly into their development strategies as Cambodia. In the early 1990s, rural Cambodia had a minimally functioning cash economy and nearly non-existent formal banking services. Only two decades later, by the end of 2013, there was roughly one active microfinance borrower for every two Cambodian households. ¹