The Asian Development Bank (ADB) and Cambodia Post Bank (CP Bank) have signed a loan of up to $10 million to spur post-pandemic recovery for the nation’s micro-, small- and medium-sized enterprises (MSMEs) by increasing access to finance, with at least half earmarked for women.

“Improving MSMEs’ access to working capital and longer-term financing has considerable benefits, not only for their growth but also for job creation and broader economic recovery,” said ADB Vice-President for Private Sector Operations and Public–Private Partnerships, Ashok Lavasa, in a press release announcing the signing.

“This financing will support the profitability of these businesses by improving their competitiveness and giving them access to domestic and international production networks.”

MSMEs form the backbone of Cambodian enterprises, accounting for 99.8 percent. Additionally, they employ more than 72 percent of the labour force. However, Cambodian MSMEs face major hurdles. They have limited access to finance, with less than 20 percent of unregistered enterprises able to access a formal loan or credit from a financial institution.

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The majority of these are owned by women. According to ADB, female entrepreneurs face particularly acute challenges, with less than five percent able to access formal credit.

“CP Bank has prioritised the development of financing for MSMEs to help them grow and evolve so they can create more jobs and expand their contribution to the broader economy,” said CP Bank CEO, Toch Chaochek.

“The assistance from ADB will help us to provide additional financial products and services to these underserved businesses while supporting their working capital and investment needs.”

ADB has pledged to help CP Bank incorporate gender equality and women’s empowerment into its business activities by developing a gender action plan and employing a staff-level gender focal point.

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Since joining ADB in 1992, Cambodia has received more than $4.7 billion in sovereign and non sovereign loans, guarantees, and technical assistance for agriculture, irrigation, finance, transport, energy, and water supply and sanitation.

Recently, ADB has helped Cambodia’s Covid-19 recovery and strengthened access for women, particularly in provinces. It has also provided support with renewable energy projects.

Based in Phnom Penh, CP Bank provides financial services to MSMEs and retail consumers, with a focus on middle-lower-income and emerging middle-income segments.