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Cambodia encountered disastrous consequences of decades of internal conflict and civil strife under the genocidal regime of the Khmer Rouge, which ruined the economy. Relief and rehabilitation operations were initiated by various international development agencies, one such social and economic rehabilitation project was ACLEDA (Association of Cambodian Local Economic Development Agencies). Formed in 1993, as a part of ''The Small Enterprise and Informal Sector Promotion project'', initiated by UNDP (United Nations Development Programme) and ILO (International Labour Organisation), ACLEDA was successful in the implementation of the project (providing training, counselling and extending credit facilities). Meanwhile, realising the need for microfinance in the country, it made microfinance the focus of the project. The case facilitates a discussion on the development of the banking system in Cambodia in the post-conflict reconstruction period. The case provides scope to discuss ACLEDA''s microfinance initiatives and its transformation into a commercial bank. The case also highlights the challenges faced by ACLEDA to sustain the growth in an underdeveloped financial system.