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IFC Banking on Smart Graduates

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The IFC’s first direct investment in Cambodia’s education sector is expected to improve higher education standards. Supplied

The International Finance Corporation (IFC), a member of the World Bank Group, has provided a $13 million loan to support a higher education campus for the Acleda Institute of Business that will help raise education standards, enhance students’ employability and encourage sustainable economic growth.
 
The loan will allow Acleda Bank to transform its current subsidiary, Acleda Training Center Ltd, into a higher quality education institution offering associate, bachelor’s and master’s degrees in business education, including finance and banking.
 
Acleda Bank is Cambodia’s leading financial institution and biggest graduate recruiter with an annual hiring of 1,000 graduates.
 
“Our aim is to make the Acleda Institute of Business a benchmark for excellence in business education in Cambodia,” said Ponloeu Chhan, the Director of the Acleda Institute of Business. “We are happy to be partnering again with IFC, which shares our goals of improving education standards and employability.”
 
The loan will support the construction of a new campus including school buildings, administration building, library, canteen, dormitories and sports complex by 2018. The new campus buildings will be built in line with IFC’s Green Building Standard, which requires reductions of at least 20 percent in energy, water and materials consumption compared with equivalent buildings.
 
The investment is IFC’s first direct investment in Cambodia’s education sector and is expected to improve higher education standards and students’ attractiveness to employees by hiring qualified teachers with strong academic credentials. The new campus is expected to reach more than 3,300 additional students and 3,100 training participants.
 
“Investing in education creates a sustainable path out of poverty by building a pipeline of well-trained employees,” said Vivek Pathak, the IFC Director, East Asia and the Pacific. “Our investment will help Acleda Bank expand access to quality education that meets Cambodia’s job-market needs and develop its human capital.”
 
As part of its strategy for reducing poverty and improving education, the government has made it a priority to improve the quality of its higher education institutions to address the mismatch between job market requirements and higher education offerings.
 
The institution has invested in 75,750 square meters of land at Anlong Kngan village, Sangkat Khmuonh, Khan Sen Sok, Phnom Penh. The institute is being built with a budget plan of $21 million and will have 627 staff. These buildings will be finished in 2018.
 
Meanwhile, according to a recent report from the Asian Development Bank (ADB), tackling the skills gap mismatches and boosting the productivity of the labor force are key challenges facing Cambodia if it is to maintain its impressive growth.
 
“Most of the country’s labor force is young, but often not equipped with skills that match business needs, so the challenge for policymakers is to address this gap and mismatch,” said ADB Chief Economist Shang-Jin Wei.
 
“Developing a more educated, employable and productive workforce is essential for Cambodia to broaden its economy beyond the current four mainstays of garment manufacturing, tourism, construction and agriculture and to sustain high growth.”
 
Heng Sour, the spokesman for the Ministry of Labor and Vocational Training, recently said that the demand for skilled labor does not match the labor available because most Cambodians choose to study social sciences at university, and there is an oversupply of graduates with those degrees in the market.
 
Reforms to higher education that started in 2013 saw the Ministry of Education reduce courses in management, marketing, banking and accounting and encourage students to study sciences because there was more demand for workers with technical skills, Mr. Sour said. The labor and education ministries have also launched short courses on vocational training, he added.
 
A survey by the International Labor Organization released early this week said Cambodia has one the lowest unemployment rates in the world, with only 0.55 percent of the working-age population unemployed. However, the proportion of people working in vulnerable and low-wage jobs is also among the highest in the world.

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