The ministry report shows that last year there were 52,154 small and medium-sized enterprises in the Kingdom. Yousos apdoulrashim
SMALL and medium-sized enterprises (SMEs) are unlikely to apply for loans from the state-owned Agricultural and Rural Development Bank (ARDB) despite its launch of a $50-million fund for SMEs last week, due to rising fears of an economic downturn caused by Covid-19.
ARDB CEO Kao Thach told The Post on Monday that the bank has not yet received proposals from the SME sector for loans because of Covid-19 pandemic.
“No one requested a loan right now, they are waiting to see when the virus situation will improve,” Thach said.
The government on Monday confirmed another three cases of coronavirus infections, bringing the Kingdom’s total to 87.
During the launch ceremony last week, Thach said the fund aims to help companies boost productivity and improve their competitiveness amid the impact of the Covid-19 outbreak and the EU’s partial withdrawal of the Everything but Arms (EBA) scheme.
The enterprises can borrow up to $300,000 each, with a six per cent annual interest rate for loans used as working capital and 6.5 per cent for those used for investment, he said.
A survey of 71 enterprises in the Kingdom by the Ministry of Industry and Handicraft found they needed assistance in market research, service development, packaging, technology adoption, human resources, access to labour and finance, business registration, taxation and improving hygiene standards.
The SME sector should not take loans from the banks to expand the business amid the Covid-19 outbreak as it will be a very high risk, Ly Ly Food Industry director Keo Mom said.
“If they borrow funds right now, they will face a high risk while the Covid-19 virus is spreading in the Kingdom. However I am optimistic that there are a lot of SMEs that will request loans after this virus has been contained,” she said.
The ministry report shows that last year there were 52,154 small and medium-sized enterprises in the Kingdom, with 824,245 employees.
An International Finance Corporation report released in August last year 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 microfinance institutions (MFIs) and banks.
The report estimates that the unmet demand for credit from women entrepreneurs is currently $4.2 billion – equivalent to almost 63 per cent of Cambodia’s $6.7 billion national budget for 2019.
