Business

Cambodia’s Coast and Capital-based Businesses Hit Hard by Covid-19

A new study reveals 96 percent of businesses - predominantly women-led - in the Cambodian capital and Preah Sihanouk province were heavily hit by pandemic-induced restrictions.
Unfinished buildings shadow other skyscrapers. Kiripost/Penh Chamroeun
Unfinished buildings shadow other skyscrapers. Kiripost/Penh Chamroeun

PREAH SIHANOUK PROVINCE. Businesses across the Cambodian capital and Preah Sihanouk province have been heavily impacted by Covid-19, with many forced to close their doors, especially those owned by women, research reveals.

In the study, obtained by Kiripost on Tuesday, 96% of respondents said the pandemic had affected business. The research was conducted by Coalition for Integrity and Social Accountability (CISA) with Australian funding.

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Him Yun, executive director at CISA, said Preah Sihanouk and Phnom Penh were targeted for research because these areas faced severe challenges during the pandemic-fuelled lockdowns.

“They have challenges and what they request from us is that they want us to train them in digital marketing and legal issues,” Yun said. He added that, for example, beach vendors need training on their legal rights when being removed by authorities for selling.

Small and medium-sized enterprises (SMEs) are critical drivers of Cambodia’s economic growth, contributing significantly to the economy. They account for 70% of employment, 99.8% of companies, and 58% of GDP.

Citing the International Finance Corporation (IFC), the proportion of women-owned SMEs in Cambodia accounts for 61%, significantly higher than many countries in Southeast Asia. However, women-owned businesses in Cambodia are mainly micro and informal. Women entrepreneurs own 62% of micro-businesses and a notable 26% of SMEs, according to IFC.

CISA has formed a partnership with Pact Cambodia to strengthen young entrepreneurship by creating a young women entrepreneurs network. The network is provided with training in good governance, entrepreneurship, leadership, how to manage micro businesses and financial literacy.

“For example, in the case of fireworks sellers on beaches, authorities take their fireworks and throw them away or sell them to others. This is according to vendors, and authorities respond,” said Yun. “We as civil society help facilitate between the authorities and vendors, so they talk and find solutions,” he added.

CISA also hosts a monthly Monday event to discuss challenges and solutions when doing business.

The research also revealed 89% of businesses have lost income, 71% have seen a decrease in customers and 51% have temporarily closed their business. It found that 55% of women entrepreneurs plan to grow their business despite these major setbacks.

An additional 39% of female respondents report being in debt, of which 68% have received loans from microfinance institutions (MFIs). A total of 67% of respondents report high concern on loan repayments, with 28% reporting some concern.

If another pandemic outbreak was to occur, 91% said they do not know what they would do with their business. Another 2% said they would close and 6% would remain open.

The research also found discrimination due to Covid-19, with 75% of respondents claiming people refused to buy their products or communicate with them. A total of 65% reported people walking away from them, and 15% said they received rude remarks.

Chhun Dary, deputy governor of Preah Sihanouk, said on Tuesday that businesses have been affected by the pandemic because of the lockdown.

“Kompong Som has had red zones and lockdowns so people found it difficult to travel and leave their homes, so doing business was affected, especially women entrepreneurs,” Dary said.

“They are contributors of family revenue and when Covid came, it affected their businesses. They complained when authorities closed markets to prevent community spread and they sold outside markets on public roadsides. They [authorities] also encouraged them to do so,” she said. “We were not strict against them selling on roads.”