Cambodia Post Bank Plc (CPBank) has partnered with the Asian Development Bank (ADB) on a $10 million loan initiative to provide to the Kingdom’s micro-, small- and medium-sized enterprises (MSME) to support their recovery after years of Covid-related disruptions, according to ADB.
“At least 50 per cent of the proceeds are marked to finance MSMEs led by women,” the Metro Manila-based multilateral lender said in a February 7 statement.
“MSMEs account for 99.8 per cent of all enterprises in Cambodia and employ upwards of 72 per cent of the labour force. Cambodian MSMEs have limited access to finance, with less than 20 per cent of unregistered enterprises acquiring a loan or a line of credit from a financial institution.
“Most of them are owned by women. The challenges facing female entrepreneurs are particularly acute, with fewer than five per cent having access to formal credit.
“ADB will help CPBank to incorporate gender equality and women’s empowerment into its business activities through the development of a gender action plan and the appointment of a staff-level gender focal point,” It added.
ADB vice-president for Private Sector Operations and Public-Private Partnerships Ashok Lavasa said in the statement: “Improving MSMEs’ access to working capital and longer term financing has considerable benefits, not only for their growth but also for job creation and broader economic recovery.
“This financing will support the profitability of these businesses by improving their competitiveness and giving them access to domestic and international production networks,” he was quoted as saying.
In the same statement, CPBank CEO Toch Chaochek similarly commented: “CPBank has prioritised the development of financing for MSMEs to help them grow and evolve so they can create more jobs and expand their contribution to the broader economy.
“The assistance from ADB will help us to provide additional financial products and services to these underserved businesses while supporting their working capital and investment needs,” he said.
The Phnom Penh-based CPBank is also a participating financial institution (PFI) in Credit Guarantee Corporation of Cambodia Plc’s (CGCC) $200 million Business Recovery Guarantee Scheme (BRGS), which aims to widen access to formal loans for the Kingdom’s small- and medium-sized enterprises (SME).
Chaochek told The Post recently that CPBank accounted for roughly $1 million of the total $89 million in loans that CGCC reported to have guaranteed as of December 31, 2022 under the BRGS, which was launched on March 29, 2021.
“The scheme has been a big help for SMEs who’ve been facing funding shortages and don’t have the collateral to obtain loans for business expansions or just to keep from going under,” he said.
The CGCC confirmed that the Ministry of Economy and Finance has authorised the extension of the BRGS beyond December 31, 2022, until all funds have been utilised.
The ADB statement noted CPBank “provides financial services to MSMEs and retail consumers with a focus on middle-lower-income and emerging middle-income segments. It has the country’s fifth-largest branch network and serves more than 258,600 customers in urban and rural areas”.
It noted that ADB was “established in 1966” and “owned by 68 members – 49 from the region”.
“Since joining ADB in 1992, Cambodia has received over $4.7 billion in sovereign and non-sovereign loans, guarantees and technical assistance for agriculture, irrigation, finance, transport, energy, and water supply and sanitation among others. ADB’s support is closely aligned with the country’s development priorities.
“Recent ADB assistance has helped to mitigate the impacts of Covid-19 and strengthen access for women, particularly in provinces. ADB has also supported public-private partnerships and private sector renewable energy projects in Cambodia,” it added.