The Agriculture and Rural Development Bank (ARDB) has signed Memorandums of Understanding (MoU) with the Cambodia Food Manufacture Association (CFMA) to disburse $50 million in loans from the government to small- and medium-sized enterprises (SME) for business expansion and productivity.
ARDB CEO Kao Thach said during the signing ceremony on Monday that the funds will help boost Cambodian exports so the Kingdom can repel some of the economic impacts from Covid-19.
“ARDB will provide all SMEs with low-interest loans. The fund can provide for up to 500 SME’s to expand their businesses,” he said.
The fund aims to help companies boost productivity and improve their competitiveness amid the impact of the Covid-19 outbreak and the EU’s partial withdrawal of the Everything but Arms (EBA) scheme, ARDB said.
Enterprises can borrow up to $300,000 each, with a low six per cent annual interest rate for loans used as working capital and 6.5 per cent for those used for investment, it said.
The president of CFMA, Meav Soktry said he will recommend that his members apply for loans from ARDB.
“CFMA greatly appreciates the ARDB providing low-interest loans to SMEs. For those of my members who want to expand their businesses, I will recommend they apply for loans from this bank,” Soktry said.
Despite the low-interest loans, SMEs are unlikely to apply for them due to rising economic uncertainty caused by Covid-19.
Thach told The Post on Monday that the bank had not yet received proposals from the SME sector for loans because of Covid-19 pandemic.
Last week the ARDB also signed an MoU with Cambodia Women Entrepreneurs Association (CWEA), Young Entrepreneurs Association of Cambodia (YEAC), and Cambodia Investors Club (CIC) to enhance access to finance for SMEs.