Janine Ferretti, head of the World Bank Group’s watchdog, the Compliance Advisor Ombudsman (CAO), will resign after the IFC Board rejected her office’s finding that IFC violated its own environmental and social rules in Cambodia’s microfinance sector.
The case began with a 2022 complaint filed by LICADHO and Equitable Cambodia on behalf of Cambodian borrowers and targeting six major microfinance institutions tied to IFC investments: ACLEDA, Amret, Hattha Bank, Prasac, LOLC, and Sathapana. CAO found the complaint eligible, moved it into compliance review, and opened a formal investigation in August 2023. In 2025, Human Rights Watch reported that IFC had invested more than US$400 million in Cambodian microfinance providers over the previous decade, contributing to soaring levels of over indebtedness and what Bloomberg described as one of the world’s most severe microfinance crises, with Cambodia “a poster child for what can go wrong”.
CAO submitted its investigation report to the IFC Board on October 14, 2025, concluding that IFC had not complied with its Sustainability Framework in either due diligence or supervision of its investments. CAO found this contributed to harm suffered by vulnerable borrowers, including Indigenous Peoples, such as loss of land and livelihood, food insecurity, threats to health, and child labor
On June 23, 2026, the IFC Board approved a "Special Management Action Plan" in response to CAO's investigation, while stating there had been "no policy noncompliance" under IFC's Sustainability Framework. The plan, to be monitored by CAO, offers the 18 complainants a local facilitator, loan restructuring, and referrals to Cambodia's Financial Consumer Protection Center, the National Bank of Cambodia hotline, and mediation services. IFC also committed to support a financial ombudsman in Cambodia, responsible-lending certification for about 65,000 credit officers, and broader reforms drawing on lessons from this case. The Board credited IFC's two decades of work in Cambodia's microfinance sector, whose clients now include more than 400,000 microenterprises and 1.7 million farmers.