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SME Bank comes up short on loans

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SMEs can borrow up to $200,000 for working capital and $300,000 for investment capital with a maximum interest rate of seven per cent per year and a repayment period of seven years. Hin Pisei

SME Bank comes up short on loans

The Ministry of Economy and Finance wants to ease loan requirements for small and medium-sized enterprises (SMEs) from the State-owned Small and Medium Enterprise Bank of Cambodia (SME Bank) and offer more financial resources to boost production.

Spokesman Meas Soksensan told The Post that the ministry has reviewed the existing loan application process for local SMEs and found that many are not eligible.

“We want to see what the obstacles are [for the SMEs],” he said. “At the same time, we are trying to get them to properly register their businesses into the system and make it easier for us to manage them.

“We will try our best to help SMEs receive reserve funds because we want to make it easier for them to get loans,” he said.

SME Bank, with $100 million in government assets for loans, had a soft launch in April in conjunction with the ministry’s “SME Co-Financing Scheme 2020” (SCFS) – a joint venture between SME Bank and a number of financial institutions.

Federation of Associations for Small and Medium Enterprises of Cambodia (Fasmec) president Te Taingpor told The Post that despite the launch of SME Bank, however, requirements remain a major barrier for local SMEs to access loans.

“Most SMEs are already too far in debt to other financial institutions, leaving them without enough collateral to seek additional funds from SME Bank, which is why we don’t see many SME Bank loans,” he said.

SME Bank CEO Dexter Tan in June said the bank has allocated about 10 per cent of its total capital to SMEs and he hopes the full $100 million will be released by the end of the year.

There are currently 33 financial institutions involved in the SCFS – SME Bank, 23 commercial banks, two specialised banks, five microfinance deposit-taking institutions (MDIs) and two microfinance institutions (MFIs).

SMEs can borrow up to $200,000 for working capital and $300,000 for investment capital with a maximum interest rate of seven per cent per year and a repayment period of seven years.

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