MoUs boost finance access for SME’s

THE Agriculture and Rural Development Bank (ARDB) has signed Memorandums of Understanding (MoU) with the Cambodia Food Manufacture Association (CFMA) to disburse $50 million in loans from the government to smalland medium-sized enterprises (SME) for business expansion and productivity.

ARDB CEO Kao Thach said during the signing ceremony on Monday that the funds will help boost Cambodian exports so the Kingdom can repel some of the economic impacts from Covid-19.

“ARDB will provide all SMEs with low-interest loans. The fund can provide for up to 500 SME’s to expand their businesses,” he said.

The fund aims to help companies boost productivity and improve their competitiveness amid the impact of the Covid19 outbreak and the EU’s partial withdrawal of the Everything but Arms (EBA) scheme, ARDB said.

Enter prises ca n borrow up to $ 300,000 each, wit h a low si x per cent a nnua l interest rate for loa ns used as working capita l a nd 6.5 per cent f or t hose u se d f or i nvestment, it sa id.

T he president of CFM A, Meav Soktr y said he will recommend t hat his members apply for loans from ARDB.

“CFMA greatly appreciates t he ARDB prov iding low-intere st loa ns to SMEs. For t hose of my members who want to ex pa nd t hei r businesses, I w i l l recom mend they apply for loans from this bank,” Soktr y said.

Despite t he low-i ntere st loa ns, SMEs a re unli kely to apply for them due to rising economic uncertainty caused by Covid-19.

T hach t old T he Post on Monday t hat t he ba n k had not yet received proposa l s from the SME sector for loans bec au s e of Cov id-19 pa ndemic.

Last week t he A RDB a lso signed an MoU with Cambod ia Women Ent repreneu rs Associat ion (CWEA), Young Entrepreneurs Association of Cambodia (Y EAC), and Cambodia Investors Club (CIC) to enhance access to finance for SMEs.