SME Bank Expected to Help Boost Local Production
AKP Phnom Penh, May 07, 2020 --
State-run SME (Small and Medium Enterprise) Bank is expected to help lift local productions, supplying domestic demands, officials and key insiders said.
The remarks were made after the official operation of long-awaited SME Bank is scheduled within this year, in a move to reply to the financial need of SMEs.
Speaking at a press conference here at the Office of the Council of Ministers this morning, Mr. Chhea Layhy, Director of SMEs Department at the Ministry of Industry, Science, Technology, and Innovation, said that the ministry is urging the informal SMEs to register legally at the ministry to get benefits and to be eligible for financial accesses at the SME Bank.
“The ministry and relevant partners are working to disseminate the how-to-do processes of accessing to financial services of the bank to the SMEs,” Mr. Layhy said. “With financial accesses, those SMEs will expand and upgrade technologically their production to supply domestic market.”
The SME bank, under the management of Ministry of Economy and Finance, has US$100 million as capital approved by the government as special fund to help the sector.
Oknha Te Taing Por, President of the Federation of Associations of Small and Medium Enterprises of Cambodia (FASMAC), said in the function that the operation of SME Bank will give option to SMEs to access financial services over the existing financial institutions –commercial banks and microfinance institutions (MFIs) to expand production.
The SME Bank will functionally help SME sector because currently SMEs face difficulties in accessing financial services with commercial banks and MFIs over amount of loan and condition of required collateral for the loan, Oknha Te Taing Por said.
“With financial accesses, local production from SME sector will see a fast growth and it is in line with the government’s industrial development programme to boost the SME production to supply local market, to reduce dependence on imports of finished products, and also to boost exports,” he said.
Ms. Keo Mom, Chairwoman of LyLy Kameda, a joint venture between Japanese firm Kameda Seika and local business LyLy Food Industry, echoed the remarks.
“The SME Bank will not only be a source of financial access to SMEs, but also encourage the SMEs which are family-based to prepare themselves for legal accountability of financial statements and those who are informal SMEs to register to get benefits from the government’s help,” Ms. Keo Mom underlined.
The SME Bank will be actively involved in agro processing businesses, bringing value added to the industry and SMEs that are backed by foreign direct investment, in tourism sector and tech start-ups.
According to figures from the ministry, there are currently about 520,000 micro, small and medium-sized enterprises, but only 10 percent of them are legally registered at the ministry.
By Chea Vannak