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Paving the way for new SMEs

Workers bundle packaged foodstuffs into plastic bags at an SME in Phnom Penh’s Por Sen Chey district last month.
Workers bundle packaged foodstuffs into plastic bags at an SME in Phnom Penh’s Por Sen Chey district last month. Hong Menea

Paving the way for new SMEs

The government is reviewing a draft sub-decree that would see the creation of a one-stop shop to handle small- and medium-enterprise (SME) registration aimed at encouraging more of them to join the formal sector and improving the quality of state support, an official said yesterday.

“Sometimes SMEs don’t know where to register as there are 18 institutions involved,” said Heng Sokong, a spokesman for the Ministry of Industry and Handicraft. “When we have clear data [provided by their registration], we know their ability and capital, and then we can provide financial and technical assistance.”

Sokong said a sub-decree is currently under review by the deputy prime minister, who will then submit it to Prime Minister Hun Sen for approval. The envisioned office will be controlled by the Ministry of Industry and Handicraft, while the other 17 concerned ministries will provide expertise and resources.

According to Sokhong, less than 40,000 of some 500,000 SMEs known to operate in Cambodia have registered. The remainder operate in a parallel economy, often beyond reach of government support.

“After registration, they will be protected by law,” he said.

Te Taing Por, president of the Federation of Associations for Small and Medium Enterprises of Cambodia (FASMEC), said his organisation has been pushing the government to establish a one-stop shop to handle SME registration and business-related affairs for some time.

“A one-stop shop makes it easier for those in the private sector who must go to many different places to register, which takes more time and money,” he said. “It’s too much. It should take place under one roof and all institutions involved can work together in one place.”

Por said the government recognises the value of SMEs in economic development and the creation of a one-stop shop will allow the ministries concerned to work together to develop a policy that will strengthen these enterprises.

“I am sure that the government will not let SMEs die,” he said. “SMEs are the backbone of the economy, even in China and Japan. [SMEs] help reduce imported products, create more jobs and eliminate immigration.”

And there is a lot to be done. Cambodia currently imports $4 billion worth of products from Thailand and Vietnam while its domestic SMEs produce just $500 million worth of goods, Por noted.

Ung Davay, owner of Leang Leng Fish Sauce Enterprise, welcomed news of the one-stop shop initiative, recalling the long time it took to process her small enterprise’s registration paperwork. She said apart from facilitating registration, the government should encourage and promote SMEs in the international market.

“Some SMEs does not know how to export their products abroad, even when their product is good,” she said. “The government should train and provide support for them to export and compete better with foreign products.”

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