The state-owned Agricultural and Rural Development Bank (ARDB) on Monday launched a $50-million fund to increase access to credit for small- and medium-sized enterprises (SMEs) in the local agriculture sector.
Speaking during the launch, ARDB CEO Kao Thach said more than 500,000 local SMEs could benefit from the fund.
“The fund aims to help companies boost productivity and improve their competitiveness,” he said.
Thach said enterprises can borrow up to $300,000 on each loan, with a six per cent annual interest rate for loans used as working capital and 6.5 per cent for that used for investment.
Cambodia Women Entrepreneurs Association (CWEA) president Eng Lykuong said the new fund will prove very useful for local SMEs. “The $300,000 can help an entrepreneur to take her business to the next level.”
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 microfinance institutions (MFIs) and banks.
The report estimates that the unmet demand for credit from women entrepreneurs is currently $4.2 billion – equivalent to almost 63 per cent of Cambodia’s $6.7 billion national budget for 2019.
A survey by the Ministry of Industry and Handicraft of 71 enterprises in the Kingdom found they needed assistance in market research, service development, packaging, technology adoption, human resources, access to labour, access to finance, business registration, taxation and improving hygiene standards.
The SME Bank, a government-backed institution that aims to expand access to credit for local SMEs, is expected to launch soon.
“We are now waiting for a licence from the Cental Bank,” Ministry of Economy and Finance spokesman Meas Soksensan said.