Under an Australian government-funded program, businesses in Cambodia can now apply for grants to creatively fight poverty
YOUNG Cambodian entrepreneurs will have more chances to raise capital and improve their businesses after a new Australian government-backed Enterprise Challenge Fund, or ECF, gets under way in the Kingdom.
Last week, Finance Minister Keat Chhon and Australian Ambassador Margaret Adamson signed a Memorandum of Understanding in Phnom Penh to implement the fund, a six-year, US$20 million grant program designed to raise private-sector contributions to poverty-reduction schemes.
"The project will provide more capital to develop private-sector businesses as well as improve people's lives," said Kang Chandararot, head of the economics unit at the Cambodian Institute of Development Study.
The ECF was launched in 2007 to target funding opportunities in Fiji, Papua New Guinea, Indonesia and the Philippines, said Sin Sovith, senior program manager with AusAID.
ECF's second phase - to include Cambodia, East Timor, Laos, the Solomon Islands and Vanuatu - launched in April this year.
The national elections in July and the formation of a new government in September delayed implementation of the grant program, the details of which were finalised in last week's MoU, Sin Sovith said.
"The ECF in Cambodia is part of a new approach being piloted in the Pacific and Southeast Asia," he said.
"We all know that sectors such as agriculture, garments, construction and tourism are vital to the Cambodian economy.
"ECF seeks to support these and other areas by providing incentives for the private sector to invest in commercially viable projects which provide opportunities for a broader cross-section of Cambodians."
The program will provide grants of between $100,000 and $1.5 million, but at least 50 percent of all project costs must by met by a private sector partner, Sin Sovith said. All projects must also have positive development outcomes, no commercial funding and be self-sustaining within three years.
Sin Sovith said NGOs could participate in the grant program by partnering with private firms to bid for grants.
The ECF will be implemented in collaboration with the Council for Development in Cambodia, and fund representatives have met with chambers of commerce in Siem Reap, Battambang, Kampong Cham and Kampot to promote the program, Sin Sovith said.
Bidders were invited to submit a concept note in June 2008 - ECF received 25 - with an assessment panel to determine successful candidates later this month, Sin Sovith said, adding that the first round of grants is expected to be released early next year.
Ngoun Meng Tech, director general of the Cambodian Chamber of Commerce, said the ECF program would offer more opportunities for local entrepreneurs to raise capital and improve their businesses.