Annual NBC meet to key on SME woes

THE National Bank of Cambodia (NBC) will host its 8th Annual Macroeconomic Conference 2021 in late December to serve as a policy input to analyse and characterise the vulnerabilities of small and mediumsized enterprises (SMEs) during the Covid-19 crisis, in recognition of their invaluable role in spurring economic activity.

To be convened under the theme “Challenges for Cambodian SMEs’ Development and Policy Options”, the Annual Macroeconomic Conference is an initiative of the central bank to collect input for policy analysis and planning to optimally stimulate national economic growth, the NBC said in a May 25 press release.

This year in the eighth iteration of the conference, the NBC aims to promote research on the Covid-era plight of the Kingdom’s SMEs as a tool to make national economic development policies more resilient and inclusive. The event will be attended by experts, researchers, and national and international stakeholders.

In Cambodia, SMEs account for more than 90 per cent of all enterprises and over 70 per cent of total employment, and contribute nearly 60 per cent of gross domestic product (GDP), the NBC said, adding that SMEs have been instrumental in improving livelihoods and reducing poverty, especially in rural areas.

Even as drivers of economic growth and agents of poverty reduction, SMEs are facing numerous business challenges and massive hurdles to sustainable development, the NBC said, citing a study on the status of

SMEs in the Kingdom.

“The spread of Covid-19 has further affected the operations of SMEs which were already vulnerable to pre-existing shocks.

“In this context, in order to contribute to increasing the research on the development and resilience strengthening of SMEs, which remains scarce, the NBC has selected ‘Challenges for Cambodian SMEs’ Development and Policy Options’ as the research topic of the eighth macroeconomic conference in 2021.”

Federation of Associations for Small and Medium Enterprise of Cambodia (FASMEC) president Te Taingpor recently told The Post that while financial institutions abound throughout the Kingdom, high collateral requirements are a major roadblock for SMEs to access financing.

“The greater part of our SMEs only receive limited sums as the size of collateral requirements from banks or microfinance institutions [MFIs] to access funds continues to grow.

The government – through Small and Medium Enterprise Bank of Cambodia Plc (SME Bank) with a $150 million capital investment – is making an effort to support the Kingdom’s SMEs and provide them with low-interest loans.

In April last year, the Ministry of Economy and Finance rolled out its SMEs Co-Financing Scheme (SCFS): a joint venture between SME Bank and 23 commercial banks, two specialised banks and seven MFIs – five of which are licensed to accept deposits.

SMEs can borrow $200,000 for working capital and $300,000 for investment capital, at a seven per cent annual interest rate and a four year period of payment, the ministry said. “The collateral depends on the criteria of the financial institution. All SMEs can apply for a loan but they must be registered with the ministry.”