The Asian Development Bank (ADB) has approved a third loan of 10 million US dollars to Cambodia to help the country develop its nascent financial sector, the bank said in a news release Friday.

Under its Financial Sector Program for Cambodia, ADB has already provided two loans of 10 million US dollars each to the country.

Cambodia's nascent financial system has been a constraint faced by the government in achieving its development objectives, said ADB, adding that the program was aimed at promoting the development of a sound, market-based financial system.

"The country's financial sector has made significant progress since the program began. There is greater financial stability, increased financial services and indications of growing confidence in the sector," said Samiuela Tukuafu, an ADB financial specialist.

The achievements of the first two loans and the Cambodian government's growing capacity to implement reforms justify continued support under a third loan, said ADB.

The third loan will help Cambodian government adopt a secured transactions law, establish a public registry for secured transactions and establish a financial intelligence unit.

ADB has also approved a 500,000 US dollar technical assistance grant to support the National Bank of Cambodia, the country's Ministry of Economy and Finance and the Ministry of Commerce in implementing the various policy and institutional reforms.

ADB's loan will be drawn from its Asian Development Fund. It carries a 24-year term, including a grace period of eight years, and an interest rate of 1 percent per annum during the grace period and 1.5 percent per annum thereafter.

Source: Xinhua