A total of 350 tourism businesses have received $54.16 million in funding from SME Bank, however, claims are being made that more needs to be done to help businesses struggling to recover from the pandemic and global economic crisis to access finance.
According to SME Bank, the $54.16 million funding the 350 businesses received represents 36.1 percent of a total budget of an available $150 million from the Tourism Restoration and Growth Sector (TRCS) co-financing project.
The bank added that of the tourism businesses to receive funding, 29 percent were hotels, 25 percent were guesthouses, 31 percent were restaurants and 15 percent were to tourism support businesses, of which 41 percent were women entrepreneurs.
However, tourism players claim this funding is not enough and are urging the government and bank to facilitate the conditions of funding for those facing financial hurdles, while lobbying to decrease the price of flight tickets to attract more international visitors.
Chhay Sivlin, President of Cambodia Association of Travel Agents (CATA), said that 36.1 percent of the total $150 million budget is limited and insufficient for tourism businesses, especially those who have financial challenges and might not be eligible to borrow money from SME Bank.
“It doesn’t mean all business owners don’t want to borrow money from them. When they hear about a $150 million fund, they really want to. However, after they research, those who face difficulties cannot borrow money from them [SME Bank] because they don’t have a good financial statement. Only those who have good financial statements can borrow,” she said.
During Covid-19, the tourism sector was hit hard, and was especially harmful for tourism-related SMEs. Therefore, there are many businesses in tourism unable to earn profits, with some forced to close their doors. In order to borrow money from SME Bank, it is required to have a good financial statement.
Therefore, those who really need funds to support their business in the long-run miss the opportunity, according to Sivlin. “If SME Bank does not ease the conditions of borrowing funds, the funding needs will remain. Are there any solutions or mechanisms to help businesses that are really in need?,” she said.
She urged SME Bank to assist in funding conditions for those who do not have good financial conditions, so they are able to have a chance to recover and pursue their operations to serve more tourists. This is in line with the Ministry of Tourism’s target to attract seven million tourists annually by 2025.
Hong Vannak, an Economic Researcher at the Royal Academy of Cambodia, said $54.16 million funding plays a fundamental role in assisting SMEs to pursue their operations in tourism.
However, he suggests that the Ministry of Tourism facilitates and strengthens the tourism industry to welcome international tourists, such as evaluating the price of flights and tickets to tourism sites, as well as safety. He said this is necessary to attract more tourists and motivate them to use local services more.
“Right now, tourism is in operation, but if tourists do not use many services that are provided by our local SMEs, it will lead to stumbling in running their business,” he said, showing concern about the lack of local and international tourists' expenditure on services by tourism SMEs.
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