The state-owned Small and Medium Enterprise Bank of Cambodia Plc (SME Bank) has officially launched the “Phase II Co-financing Project” to prop up the business activities of local small- and medium-sized enterprises (SME) and abate economic Covid-19 woes.
The second phase was introduced after the first iteration achieved positive results, with participating financial institutions providing lifelines for SMEs in need of financing to keep from going under, and promoting economic recovery, the SME Bank noted in a press release on August 16.
The project aims to provide low-interest loans to promote the development of SMEs in priority sectors such as industry, services and commerce.
Prasac Microfinance Institution Plc executive vice-president Say Sony told The Post that his institution has been engaged in the scheme since its first phase, pitching in $5 million and disbursing $10 million under the project.
He said the management has agreed to match these figures in Phase II. “This special scheme will enable SMEs to access bank loan more easily and at lower costs, so they can come to Prasac or other participants if they need loans to support their business during this hard time.”
Sony lauded the government over the successful coronavirus vaccination campaign, but called on it to exert even more effort in its fight against Covid-19.
“We do hope general business activities will be back to a ‘new normal’ as soon as possible, and we’re counting on existing and new clients to come to us for loans to restart or expand their businesses, so we are ready to serve them through this SME Bank scheme as well as directly through our own funds,” he said.
The funds under this co-financing project amount to $100 million, which is an equal counterpart fund between the SME Bank and the participating financial institutions.
At present, there are 26 participating financial institutions: 21 commercial banks, one specialised bank and four microfinance institutions (MFI) – three of which are authorised to receive deposits.
“SMEs in need of funds can apply for a loan under this scheme at any participating financial institution, in accordance with the terms of this co-financing project and the lending conditions at each participating financial institution,” the SME Bank said.
Acleda Bank Plc president and group managing director In Channy told The Post that his bank pitched in around $15 million in the first phase and plans to double that in the second iteration.
“Joining the scheme is important since we could join forces with the Royal Government of Cambodia in support for SMEs that need to have access to funds with affordable interest rates.
“At the same time, [we can] improve our leverage in increasing and creating access for SMEs to Acleda Bank’s financial services, and plus, support SME clients who have faced difficulties and challenges in the Covid-19 environment – in short to help them recover.
“Of course, [we’ll] continue to increase our [contribution of] funds into the scheme so that we can help our country to achieve an economic recovery, and at the same time, we can lend our support to our clients by offering lower, more affordable interest rates,” he said.
With the pandemic still raging, Acleda continues to improve digital infrastructure to serve clients in a more convenient way, according to Channy.