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Logo of Phnom Penh Post newspaper Phnom Penh Post - Officials ignore call for special small and medium enterprises bank

Officials ignore call for special small and medium enterprises bank

Cambodian officials have refused to establish a specialised bank for small and medium enterprises (SMEs) despite experts saying the sector needs aid in order to compete efficiently with ASEAN economic integration in 2015.

Hang Chounnaron, secretary of the Ministry of Economy and Finance said Cambodia would not establish a bank of this type because the ministry was worried about existing private banks and micro-finance institutions going bankrupt because of low interest rates.

“Private banks and micro-finance institutions that already exist will be bankrupt if we establish an SME bank, because public banks have low interest rates,” he said.

“We wanted to help with loans but we cannot cause other banks to go bankrupt.”

Chew Seng Kok, managing director of Zaid Ibrahim and Co and a guest speaker at an ASEAN dialogue, said several countries had successfully implemented the SME system to help small and medium-sized entrepreneurs grow.

Japan and Malaysia had successfully undertaken it, Chew told the Post.

In Channy, chief executive and president of Acleda Bank, said some countries had specialist banks for SMEs.

“Sellers and buyers are different. Buyers need cheap, but sellers need expensive. All countries are like this,” he said.

“If the government guarantees loans to SMEs, it will enhance and encourage loans in this sector.”

Chounnaron said SMEs made up 98 per cent of the businesses in Cambodia.

Chum Vatey, from the Cambodian Chamber of Commerce, said the private sector and banks still found it difficult to work together in granting development capital.

“Even when they’re properly registered, they need capital to invest,’’ he said.

To contact the reporter on this story: Rann Reuy at reuy.rann@phnompenhpost.com

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