Logo of Phnom Penh Post newspaper Phnom Penh Post - Jica loans $50M to HKL to aid rural MSMEs

Jica loans $50M to HKL to aid rural MSMEs

Content image - Phnom Penh Post
Japan International Cooperation Agency’s (Jica’s) $50 million loan will provide funds to rural micro-, small- and medium-sized enterprises (MSMEs). Heng Chivoan

Jica loans $50M to HKL to aid rural MSMEs

Hattha Kaksekar Limited (HKL), a subsidiary of Thai-based Bank of Ayudhya Pcl (Krungsri), received a $50 million loan from Japan International Cooperation Agency (Jica) to expand its operations and support micro-, small- and medium-sized enterprises (MSMEs) in rural areas.

The loan agreement was reached on March 27 and will provide funds to rural MSMEs through the Private Sector Investment and Finance system based on Jica’s Facility for Accelerating Financial Inclusion in Asia programme, HKL said in a press release.

“Ninety per cent of the population below the poverty line currently resides in rural Cambodia. It is important to support them in their growth and create more employment to further reduce poverty.

“However, a large financial gap exists. The fact that many MSMEs have limited access to finance has restrained their growth.

“Also of note, many MSMEs are run by women. Ensuring MSMEs’ growth is an important part of the empowerment of women,” it said.

The Cambodia Inter-censal Economic Survey 2014 says women-owned 26 per cent of small and medium-sized enterprises (SMEs) and 62 per cent of micro-enterprises.

HKL said: “This loan from Jica supports HKL in expanding lending activity to MSMEs in rural areas. It is designed to reduce poverty and regional disparity in Cambodia.

Thus it will contribute not only to sustainable economic growth but also to [achieving the UN-drafted] SDGs [Sustainable Development Goals],” it added.

HKL said some 82 per cent of its customers are based in rural areas and 61 per cent of its loans are extended to women customers.

“In response to the customers’ needs for financial services, HKL has 177 branches located across the country to contribute to financial inclusion and provide services to MSMEs and other customers . . . in both rural and urban areas,” it said.

HKL president and CEO Hout Ieng Tong could not be reached for comment on Tuesday.

On Friday, the government officially launched the Small and Medium Enterprise Bank of Cambodia with an initial capital of $100 million to provide financing for SMEs.

An International Finance Corporation report released in August said Cambodia’s women entrepreneurs continue to struggle with limited access to financing for business expansion. Only three per cent have access to credit from MFIs and banks.

It estimated that the unmet demand for credit from women entrepreneurs is currently $4.2 billion – a figure that is equivalent to almost 63 per cent of Cambodia’s national budget of $6.7 billion for last year.

In mid-March, the state-owned Agricultural and Rural Development Bank on Monday launched a $50-million fund to increase access to credit for SMEs in the local agricultural sector.

MOST VIEWED

  • ‘Kingdom one of safest to visit in Covid-19 era’

    The Ministry of Tourism on January 12 proclaimed Cambodia as one of the safest countries to visit in light of the Kingdom having been ranked number one in the world by the Senegalese Economic Prospective Bureau for its success in handling the Covid-19 pandemic. In rankings

  • Ministry mulls ASEAN+3 travel bubble

    The Ministry of Tourism plans to launch a travel bubble allowing transit between Cambodia and 12 other regional countries in a bid to resuscitate the tourism sector amid crushing impact of the ongoing spread of Covid-19, Ministry of Tourism spokesman Top Sopheak told The Post on

  • Kingdom accepts Chinese vaccine, PM first to get jab

    Prime Minister Hun Sen said China would offer Cambodia an immediate donation of one million doses of the Covid-19 vaccine produced by the Sinopharm company. In an audio message addressing the public on the night of January 15, he said Cambodia has accepted the offer and

  • Reeling in Cambodia’s real estate sector

    A new norm sets the scene but risks continue to play out in the background A cold wind sweeps through the streets of Boeung Trabek on an early January morning as buyers and traders engage in commerce under bright blue skies. From a distance, the

  • PM asks India for vaccine help

    Prime Minister Hun Sen is seeking assistance from India for the provision of Covid-19 vaccines as the country has produced its own vaccine which is scheduled to be rolled out to more than 300 million Indians this year. The request was made during his meeting with

  • One million Chinese Covid-19 jabs to start rolling in from February

    The government has confirmed that Covid-19 vaccines from China are set to begin arriving in Cambodia by February. This came as the Ministry of Health recorded two imported cases of Covid-19 on January 18. While calling on people to remain vigilant against the pandemic, ministry spokeswoman