Logo of Phnom Penh Post newspaper Phnom Penh Post - New fund set to enhance SMEs’ access to finance

New fund set to enhance SMEs’ access to finance

Content image - Phnom Penh Post
Workers at the instant-noodle processing factory in Phnom Penh. The government is allocating $50 million to support small and medium-sized enterprises (SMEs) in the agricultural sector. Post Staff

New fund set to enhance SMEs’ access to finance

The government is allocating $50 million to support small and medium-sized enterprises (SMEs) in the agricultural sector. The funds can be accessed in the form of low-interest loans through the state-owned Rural Development Bank (RDB).

The initiative was revealed on Monday by Prime Minister Hun Sen, who said the goal is to increase the production capacity of local companies and make them more competitive on the international market.

“Our agricultural products are not able to compete with those of our neighbours, particularly Vietnam and Thailand, due to high costs.

“The Rural Development Bank will now be providing low-interest loans to SMEs, particularly those in the vegetable, husbandry and fishing sub-sectors,” he said

Cambodia Chamber of Commerce vice-president Lim Heng told The Post on Monday that the new fund is important because a lot of SMEs have limited access to finance.

“It is a good move, but we are still waiting to find out what the interest rate will likely be and what the collateral requirements will be,” he said.

An International Finance Corporation report released in August said Cambodia’s female entrepreneurs continue to struggle with limited access to finance for business expansion. Only three per cent have access to credit from microfinance institutions 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 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.

Hun Sen urged the Ministry of Economy and Finance to speed work on the SME Bank, an institution which will provide financial assistance to local SMEs.

The initiative to set up the bank was introduced by the prime minister in December 2017. It is currently being set up with an initial capital of $100 million.

MOST VIEWED

  • Without shoes or a helmet, a young cyclist steals the show

    Pech Theara gripped the curved handlebars of his rusty old bike, planted his bare feet on its pedals and stormed as fast as he could towards the finish line. The odds were against him as the 13-year-old faced off against kids with nicer bikes at

  • Phnom Penh-Sihanoukville expressway on schedule

    The construction of the more than $1.9 billion Phnom Penh-Sihanoukville Expressway has not been delayed despite the Covid-19 pandemic, with more than 26 per cent of the project completed and expected to finish in about two years, according to Ministry of Public Works and Transport secretary of

  • Singapore group seeks $14M in damages from PPSP over ‘breach of contract’

    Singapore-based Asiatic Group (Holdings) Ltd is seeking a minimum of $14.4 million relief from Cambodia Securities Exchange (CSX)-listed Phnom Penh Special Economic Zone Plc (PPSP) for allegedly breaching a power plant joint venture (JV) agreement. Asiatic Group’s wholly-owned Colben System Pte Ltd and 95 per

  • Over 110 garment factories close

    A government official said on November 22 that at least 110 garment factories had closed in the first nine months of the year and left more than 55,000 workers without jobs – but union leaders worry those numbers could be much higher. Ministry of Labour and Vocational Training undersecretary

  • PM dispels lockdown rumours, gifts masks

    Prime Minister Hun Sen on November 12 denied rumours that he will lock down the country in response to increased Covid-19 fears, referring to them as propaganda aimed at destabilising the country. In a Facebook post, he said some people had spread rumours that the government

  • SilkAir adds flight to Phnom Penh schedule

    Silkair (Singapore) Pte Ltd is increasing its flight frequency between Phnom Penh and Singapore with a third weekly flight on Saturdays, according to Cambodia Airports’ Facebook page. The other flights offered are on Tuesdays and Sundays, with an estimated Phnom Penh arrival time at 5:35pm