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Lack of finance holds back businesswomen

A woman sells her fruit from a street cart in Phnom Penh
A woman sells her fruit from a street cart in Phnom Penh. Though Cambodian women are more able to use finance to develop their businesses, many remain stuck in tiny enterprises, according to the National Bank of Cambodia. Vireak Mai

Lack of finance holds back businesswomen

Although Cambodia’s women entrepreneurs are well positioned to expand their businesses, many remain stuck maintaining micro-enterprises, a senior National Bank of Cambodia official said yesterday, with a lack of access to larger loans holding back business potential.

The NBC joined the United Nations Capital Development Fund (UNCDF) yesterday for a conference on women and enterprises in an effort to accelerate the ability of women to access appropriate financial services and products.

Chea Serey, director general of the NBC, said that 80 per cent of all borrowers in Cambodia’s microfinance sector – where outstanding loans reached $2 billion last year – are women mostly looking to start small family businesses.

“To graduate from ‘business for survival’ to ‘business for success’ is still a challenge for women in Cambodia,” she said.

“Prejudice towards female business owners needs to be changed as well as many other cultural barriers.”

According to Keo Mom, president of the Cambodia Women Entrepreneurs Association (CWEA), Cambodia’s female entrepreneurs find it difficult to access finance due to a lack of ability to provide financial records, low trust from loan providers, and the difficulty of small-scale businesses to access larger loans.

“It is very important for loan providers to understand the situation and help solve the issue,” she said.

“The bigger capital women have, the more they invest to enlarge production.”

The UNCDF says it aims to double financial inclusion in ASEAN by 2020 through its Shaping Inclusive Finance Transformations or SHIFT initiative, which took off last year and is mostly funded by the Australian government.

Emma Tiaree, development counselor at the Australian Embassy in Cambodia, said that despite impressive strides made in ASEAN economies over the past two decades, lower growth rates and rising inequality remain a particular worry among the “frontier economies” of Cambodia, Loas, Myanmar and Vietnam, which the SHIFT program puts a particular focus on.

“The engines of these economies – entrepreneurs and small-scale businesses – are often excluded from the formal financial system, limiting their ability to grow and generate more jobs,” Tiaree said.

“This has led to inequalities in economic participation, which, if unchecked, will continue to act as a drag on national and regional economic performance,” she continued.

Stanley Boots, senior business regulation advisor at the Asian Development Bank, said Cambodia’s microfinance sector needed to formalise to realise its full potential.

“What we want to see are more companies formalising, actually becoming real business entities, and then [when] these businesses begin operating, they can create longer-term relationships with lenders,” he said.

Despite the challenges ahead, one source in the microfinance sector was optimistic that MFIs could help Cambodian women move up while raking in profit as well.

“There are a lot of success stories we get from working with women business owners,” said Bun Mony, president of the Cambodia Microfinance Association.

“There are many women who started getting loans from us with just $50 or $100, but who have now gone up to $5,000 or $10,000.”



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