The Asian Development Bank’s Cambodian country director has outlined how she will work with the Kingdom’s micro, small, and medium enterprises (MSMEs) to gain access to the recent $250 million concessional loan announced last month.
She hopes the funds will assist local business to retain staff after the bank predicted Cambodia will suffer 390,000 job losses this year because of the COVID-19 pandemic.
Sunniya Durrani-Jamal, Asian Development Bank (ABD) country director of Cambodia told Khmer Times in a recent interview that the ADB’s loan will help to finance the government’s programmes in 2020, including the support to MSMEs.
“The Royal Government of Cambodia has introduced measures that include support to the MSMEs,” Durrani-Jamal said.
Two of the government’s most prominent initiatives are the $50 million loan to the state-owned Agricultural and Rural Development Bank (ARDB).
There is also the transfer of $100 million to the newly established Small and Medium Enterprise Bank of Cambodia (SME Bank) in April 2020.
Both have been designed to increase MSME access to loans with lower interest rates and easier processes for loan approval.
“ADB fully supports the government’s initiative. As well as providing financing for the government’s expenditures in 2020, ADB has also provided technical support to help the government to design its new credit guarantee scheme for SMEs,” she added.
The $250 million is part of the development bank’s COVID-19 Active Response and Expenditure Support Programme (CARES Programme) and is under the countercyclical support facility COVID-19 pandemic response option (CPRO).
The CARES Programme will provide critically needed budgetary support to help the government address health measures to combat the spread of COVID-19, provide social assistance and relief for affected people and launch an economic stimulus for adversely affected sectors, including MSMEs.
“There are currently about 520,000 MSMEs in Cambodia and only about 10 percent of them are legally registered,” Durrani-Jamal said.
“MSMEs account for around 98 percent of all businesses and 70 percent of total employment so they are a very important part of the economy.”
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.