Logo of Phnom Penh Post newspaper Phnom Penh Post - Kingdom’s startups stuck in the middle with no capital

Kingdom’s startups stuck in the middle with no capital

Youths work at a co-working space last year in Phnom Penh.
Youths work at a co-working space last year in Phnom Penh. Photo supplied

Kingdom’s startups stuck in the middle with no capital

Despite Cambodia having a vibrant startup scene with entrepreneurs launching ventures on a near daily basis, businesses trying to tap into financial resources for growth have difficulty accessing capital and are stuck in the unbankable “missing middle”, according to a recent study.

According to a study by the Dutch Good Growth Fund (DGGF), a $200 million investment initiative that is researching potential investments in the region, a third of Cambodia’s small- and medium-sized enterprises (SMEs) have outgrown microfinancing options but remain too small to attract large investors.

The study showed that while short-term capital loans are offered by banks to registered businesses, small businesses without assets are unable to secure funding and debt financing is largely nonexistent. The study added that when it comes to seed-stage funding, there is a limited number of firms in the Kingdom willing to take on the financial risks of lending smaller amounts.

Hav Kongngy, founder of startup My Dream Home, explained that he has been trying to expand his business, but has found it difficult to access capital.

“There are no funds who offer investment of about $50,000, but that is how much I need,” he said. “It is a real problem for me, and for other entrepreneurs, because it seems too hard to grow.”

Keo Mom, president of the Cambodian Women Entrepreneurs Association (CWEA), noted that a lack of access to growth funding had long been damaging the Cambodian economy.

“Other countries have products which help with access, including accepting different types of collateral and providing commercial loans, and we need to start pursuing these options,” she said.

Julia Kho, Knowledge Manager for DGGF’s investment manager Triple Jump, explained that regardless of the struggles SMEs face in the Kingdom, the business ecosystem in Cambodia remains strong.
“Cambodia’s business scene looks like it’s quite dynamic,” she said. “It’s a vibrant ecosystem, and we hope to find some vibrant initiatives here to help fund.”

MOST VIEWED

  • Hong Kong firm done buying Coke Cambodia

    Swire Coca-Cola Ltd, a wholly-owned subsidiary of Hong Kong-listed Swire Pacific Ltd, on November 25 announced that it had completed the acquisition of The Coca-Cola Co’s bottling business in Cambodia, as part of its ambitions to expand into the Southeast Asian market. Swire Coca-Cola affirmed

  • Cambodia's Bokator now officially in World Heritage List

    UNESCO has officially inscribed Cambodia’s “Kun Lbokator”, commonly known as Bokator, on the World Heritage List, according to Minister of Culture and Fine Arts Phoeurng Sackona in her brief report to Prime Minister Hun Sen on the night of November 29. Her report, which was

  • NagaWorld union leader arrested at airport after Australia trip

    Chhim Sithar, head of the Labour Rights Supported Union of Khmer Employees at NagaWorld integrated casino resort, was arrested on November 26 at Phnom Penh International Airport and placed in pre-trial detention after returning from a 12-day trip to Australia. Phnom Penh Municipal Court Investigating Judge

  • Sub-Decree approves $30M for mine clearance

    The Cambodian government established the ‘Mine-Free Cambodia 2025 Foundation’, and released an initial budget of $30 million. Based on the progress of the foundation in 2023, 2024 and 2025, more funds will be added from the national budget and other sources. In a sub-decree signed by Prime Minister Hun Sen

  • Two senior GDP officials defect to CPP

    Two senior officials of the Grassroots Democratic Party (GDP) have asked to join the Cambodian People’s Party (CPP), after apparently failing to forge a political alliance in the run-up to the 2023 general election. Yang Saing Koma, chairman of the GDP board, and Lek Sothear,

  • Cambodia's poverty cut in half from 2009 to 2019: World Bank report

    A report published by the World Bank on November 28 states that Cambodia’s national poverty rate fell by almost half between 2009 and 2019, but the Covid-19 pandemic recently reversed some of the poverty reduction progress. Cambodia’s poverty rate dropped from 33.8 to 17.8 per cent over the 10