The state-owned Small and Medium Enterprise Bank of Cambodia (SME Bank) has expanded its capital from $100 million to nearly $150 million, industry insider Te Taingpor said on Thursday.
Taingpor, president of the Federation of Associations for Small and Medium Enterprise of Cambodia, was speaking at a press conference at the Office of the Council of Ministers.
He said the additional capital was jointly funded by 33 banks and microfinance institutions (MFIs), of which Prince Bank Plc provided $10 million and Vattanac Bank Plc $20 million.
Small and medium-sized enterprises (SMEs) can borrow $200,000 for working capital and $300,000 for investment capital from the bank, at a seven per cent annual interest rate and a payback period of not more than four years, said the Ministry of Economy and Finance.
Although the SME Bank is currently unable to provide services to its customers, SMEs can apply for a loan from its 33 participating institutions, said Taingpor.
“On behalf of SMEs, I request that the payback period be extended to six years so that enterprise owners have enough time,” he said.
On April 23, Prasac Microfinance Institution Ltd (Prasac) executive vice president Say Sony said the SME Co-financing Scheme is a partnership between Prasac and SME Bank – on behalf of the government.
He said it aims to provide low-interest loans to SMEs and build up priority sectors – manufacturing and handicrafts, curb imports while satisfying domestic demand, and create employment opportunities.
“SMEs in need of working capital can apply for a loan under the scheme at their nearest Prasac branch from now on,” he said.
Meanwhile, Prince Bank has joined the incentive and has partnered with SME Bank to provide loans to SMEs under the scheme.
On April 27, it said: “The scheme provides SME loans for capital expenditures and working capital with a special interest rate of seven per cent per annum, and for a maximum term of four years.
“SMEs that do not qualify can still work with Prince Bank staff and apply for a business loan.”
Chhea Layhy, director of the General Department of Small and Medium Enterprises and Handicraft under the Ministry of Industry, Science, Technology and Innovation, told a press conference that the scheme is focused on key priority areas, including manufacturing, services, agriculture and trade.
“Although the SME Bank was officially launched early in April, it has not been able to go into operation immediately. As far as I know, the bank is planning to start operating officially in August,” he said.
A survey by the industry ministry of 71 enterprises in the Kingdom found they needed assistance in market research, service development, packaging, technology, human resources, access to labour and finance, business registration and taxation, among others, as well to improve hygiene standards.
The finance ministry defines ‘small enterprises’ as those with an annual revenue turnover of between 250 and 700 million riel ($62,500 and $175,000) or has between 10 and 50 employees.
Meanwhile, a ‘medium enterprise’ has an annual revenue turnover of between 700 million and four billion riel or has between 51 and 100 employees.