A lack of information available on financial services and products, the inability to meet their requirements and a general lack of financial awareness are the main barriers for women entrepreneurs in access to finance, according to a senior official at the central bank.
Rath Sovannarak, director-general of the National Bank of Cambodia’s (NBC) Banking Supervision Department, made the statement on February 4 at the Entrepreneurship Ecosystem Forum on Access to Finance for Women Entrepreneurs in Covid-19 Era.
Pact Cambodia through the USAID-funded Women Entrepreneurs Act (WE Act) project hosted the event in collaboration with NBC, Khmer Enterprise, Swisscontact and Good Return.
While the Kingdom has made significant improvements in financial inclusion, Sovannarak said some challenges remain prevalent, especially for women. Although women and men have equal access to finance, a gap remains in terms of usage.
He said a UN Capital Development Fund study found that 70 per cent of savings accounts in Cambodia were inactive and low-balance, with women accounting for a larger share than men.
“Similarly, evidence shows that access to credit is somewhat similar between men and women, but women receive less in loans than men.
“To tackle these challenges, promoting innovative products for SMEs [small and medium-sized enterprises] and increasing consumer empowerment and protection and financial sector transparency have become our priority,” Sovannarak said.
Sabine Joukes, Pact Cambodia country director and chief of party of Pact’s Women Entrepreneurs Act project, said her organisation has been working with key development partners, stakeholders and the private sector to build financial education literacy and awareness, as well as studying the challenges faced by women in business in the Kingdom.
“We aim to align actors all aiming to deliver relevant financing options to young women entrepreneurs, with their needs and to ensure we address the gaps, so YWEs [young women entrepreneurs] have the best choices to meet their needs,” she said.
Chhieng Vanmunin, CEO of Khmer Enterprise, an implementation unit of the Entrepreneurship Development Fund (EDF) established by the Ministry of Economy and Finance, said his institution last year launched two rounds of assistance packages for start-ups and SMEs that were struggling under Covid-19.
He said it received nearly 300 applications from start-ups and SMEs across the capital and 18 provinces and awarded grants to 27, of which 60 per cent were women-owned.
“Khmer Enterprise sees the value in providing opportunities for women to develop start-ups and transform them into strong businesses that contribute to an expansion of the entrepreneurial ecosystem, corporate connectivity and business ventures.
“The bottleneck for local businesses, start-ups, early-stage enterprises to grow is the access to appropriate financing. Hence improving access to finance through entrepreneurship support programmes developed through partnerships among potential partners, financial institutions and investors is essential,” Vanmunin said.
According to Sovannarak, the government launched the National Financial Inclusion Strategy 2019-2025 on July 12, 2019 to “increase access to quality official financial services” and reduce the rate of women without access to financial services by half from 27 to 13 per cent and expand the use of formal financial services from 59 to 70 per cent by 2025.
“The National Bank of Cambodia has been working with stakeholders to study the feasibility of unsecured loans and to launch a number of campaigns to raise financial literacy for women and women entrepreneurs, as well as financial consumer protection,” he said.