SME Finance

Global Finance Forum Aims to Support Cambodia’s SMEs

Phnom Penh is hosting the annual Global SME Finance Forum, which has brought together more than 400 delegates from 60 countries to share their experiences of creating a supportive ecosystem and access to finance
Matthew Gamser (right), CEO of the SME Finance Forum, leads a delegates to visit ACLEDA Bank Plc Sep 19 on the sideline of Global SME Finance Forum 2022 in Phnom Penh, Cambodia. Kiripost/Siv Channa
Matthew Gamser (right), CEO of the SME Finance Forum, leads a delegates to visit ACLEDA Bank Plc Sep 19 on the sideline of Global SME Finance Forum 2022 in Phnom Penh, Cambodia. Kiripost/Siv Channa

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Cambodia is hosting the Global SME Finance Forum, where more than 400 delegates from 60 countries gathered to learn and share ways to create an enabling environment to support SMEs and financial inclusion as Cambodian finance specialists say access to financing remains a major challenge for many of the country’s SMEs.

The SME Finance Forum, an initiative managed and co-hosted by the International Finance Corporation (IFC) and the National Bank of Cambodia (NBC), is a three-day event that kicked off on September 19.

Matthew Gamser, CEO of the SME Finance Forum, said the forum exists as a center for shared learning and networking in the field of small business, finance, and financial inclusion.

“This year, we selected to come to Phnom Penh because it’s such an interesting place where you have institutions like ACLEDA that are really pushing the frontier of how you can serve small businesses, micro-enterprises, and consumers in a different way that will be more effective,” Gamser told reporters while leading a group of delegates on a tour of ACLEDA Bank Plc.

“We also have many people from the public sector here. We will have a good dialogue about how to create a better environment to support SMEs and support financial inclusion,” he added.

In Cambodia, SMEs are critical to Cambodia's economy, accounting for 70 percent of employment, 99.8 percent of businesses, and contributing 58 percent of the GDP. And one of the lingering challenges faced by the SME sector has been access to finance.

Ngeth Chou is a finance specialist and chairman of F.I Vision Capital Plc., an investment fund specializing in real estate investments and project development.

Generally, he said, SMEs in Cambodia have access to traditional loans from banks and MFIs as well as from informal lenders. However, he added, loans from banks require collateral.

As for another source of finance, which he called ‘equity financing,’ Chou said many SMEs are not yet up to the standard that investors look for, lack proper records as well as transparency, accountability, and good governance in their operations.

“Lacking all these make it difficult for SMEs to secure investments from angel investors or investment funds,” Chou told Kiripost.

“Suppose debt financing, which is a bank loan, is one hand and equity financing is another hand, I think SMEs in Cambodia have only one hand, which is the debt financing hand,” he added.

Another challenge SMEs face is the issue of high interest rates.

Although the interest rate has significantly decreased now compared with the past five or 10 years, it is still relatively high in Cambodia if compared with other countries, Chou said.

According to In Channy, ACLEDA Bank’s president and group managing director, a large share of the bank’s loans goes to SMEs.

“Out of our $6 billion loans, 80 percent are for SMEs, and the annual growth of the SME loan was 20 percent in 2021 year-on-year,” Channy said.

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