Small and Medium Enterprise Bank of Cambodia (SME Bank), the Kingdom’s newest bank with initial capital of $100 million to provide financing for small and medium-sized enterprises (SMEs), was officially launched on Saturday.
The Ministry of Economy and Finance rolled out its “SMEs co-financing” project – a joint venture between SME Bank and 23 commercial banks, two specialised banks, seven microfinance institutions (MFIs) – of which five are microfinance deposit-taking institutions, it said in a press release.
SMEs can borrow $200,000 for working capital and $300,000 for investment capital, at a seven per cent annual interest rate and a four year period of payment.
“The collateral depends on the criteria of the financial institution. All SMEs can apply for a loan but they must be registered with the ministry.
“Small enterprises must earn at least 250 million riel [$61,500] per year or employ between 10 and 50 people. Income for medium-sized enterprises must be at least 700 million riel or it must employ between 51 and 100 people,” said the ministry.
An SME Bank senior official, who spoke on condition of anonymity as he was not authorised to speak to the media, said SMEs can apply for a loan immediately.
“SME Bank is providing loans with low interest rates and will help SMEs access finances for business expansion,” he said.
While SMEs have limited access to finance, Ly Ly Food Industry Co Ltd director Keo Mom told The Post on Sunday that the fund will prove very useful for local SMEs, most of which want to borrow money for both working capital and investment capital.
“We need to borrow money for business expansions such as raw material imports and processing machines,” she said, calling on the government to facilitate collateral mobility.
Federation of Association for Small and Medium Enterprises of Cambodia (Fasmec) president Te Taingpor said his 300 members across the country will benefit from this new fund. “Fasmec is preparing to borrow money from SME Bank next week.”
An International Finance Corporation report released in August said Cambodia’s women entrepreneurs continue to struggle with limited access to financing for business expansion. Only three per cent have access to credit from MFIs and banks.
It estimated that the unmet demand for credit from women entrepreneurs is currently $4.2 billion – a figure that is equivalent to almost 63 per cent of Cambodia’s national budget of $6.7 billion for last year.
A survey by the Ministry of Industry, Science, Technology and Innovation of 71 enterprises in the Kingdom found they needed assistance in market research, service development, packaging, technology adoption, human resources, access to labour, access to finance, business registration, taxation and improving hygiene standards.
Last month, the state-owned Agricultural and Rural Development Bank (ARDB) launched a $50 million fund to increase access to credit for SMEs in the local agriculture sector.
“The fund aims to help companies boost productivity and improve their competitiveness,” its CEO Kao Thach said during the launch.
