Logo of Phnom Penh Post newspaper Phnom Penh Post - Tripartite MoU on financial literacy, inclusion endorsed

Tripartite MoU on financial literacy, inclusion endorsed

Content image - Phnom Penh Post
ABC president In Channy (left), CMA chairman Kea Borann (centre) and YEAC president Seang Sopagna at the MoU signing ceremony on Thursday. SUPPLIED

Tripartite MoU on financial literacy, inclusion endorsed

Three industry bodies are set to work together to enhance and mainstream financial literacy and inclusion among young entrepreneurs, as well as small- and medium-sized enterprises (SME) in Cambodia.

A memorandum of understanding (MoU) cum partnership agreement was signed to this effect on September 16 by the heads of the Association of Banks in Cambodia (ABC), Cambodia Microfinance Association (CMA) and the Young Entrepreneurs Association of Cambodia (YEAC), at a virtual ceremony attended by SMEs and banking and financial institutions.

The MoU aims to strengthen and expand cooperation related to training and the organisation of joint workshops and other events, in a bid to improve financial literacy and technology, advance inclusive credit services, and build communication networking among young Cambodian entrepreneurs and SMEs in the Kingdom.

CMA chairman Kea Borann said it was crucial for the three associations to team up and promote access to a wide range of responsible financial services, to underpin development of the microfinance sector and provide additional support for entrepreneurs in Cambodia, especially younger ones.

“The tripartite cooperation will be an important platform for financial professionals and young entrepreneurs to study, explore, create, test and implement innovative solutions and drive development in the business sector in Cambodia,” he said.

YEAC president Seang Sopagna pointed out that members – especially micro-, small- and medium-sized enterprises – consistently bemoan difficulties in accessing credit.

The most common sources of headaches are high interest rates, a lack of collateral or proper financial statements, and insufficient reliable information over where to obtain suitable debt financing instruments.

“Based on our experience working with SMEs on access to finance, we have found that collateral is always a major factor in lending decisions, but having the right knowledge and financial documents is just as important,” Sopagna said.

ABC president In Channy asserted that the cooperation reflects the 2019-2025 national strategy on financial inclusion, which he said aims to raise awareness and mainstream financial literacy to farmers, as well as younger and SME business entrepreneurs.

He similarly described the partnership as a platform for banking and finance professionals and entrepreneurs, as well as owners of SMEs, to discuss and find win-win solutions.

“SMEs are the backbone of the Cambodian economy, having made a significant contribution to the country’s gross domestic product [GDP] and created jobs for Cambodians.

“Recently, the Ministry of Economy and Finance, through the SME Bank of Cambodia Plc, launched the second phase of the 2021 SME Support Co-financing Project with the participation of all 26 financial institutions and capital of more than $160 million, to support SMEs with access to easy and flexible financing, as well as to provide reasonable interest rates and increase financial diversification,” Channy noted.

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