A $100 million small and medium enterprise co-financing scheme (SCFS) fund was fully subscribed by mid-October 2020, according to a senior executive of SME Bank of Cambodia.
The capital of the SME (SCFS) amounted to $100 million. It was launched on April 1, 2020, and jointly funded by the SME Bank of Cambodia and participating commercial banks and microfinance institutions (MFIs). There are currently 33 participating institutions (PFIs); 24 commercial banks, six specialised banks, and three MFIs.
The average loan was $122,514, with the minimum set at $16,800 and the maximum at $300,000. Tan Dexter, chief executive officer of SME Bank of Cambodia, said that SME Bank loans cover all small and medium enterprises (SMEs) except those in agriculture.
He added that the fund has been fully subscribed since mid-October 2020, which was four months earlier than planned. He noted the SCFS fund has benefited 753 SMEs.
“We’d like to thank all the PFIs for their support and the successful SCFS arrangement,” said Dexter.
He added 50 percent of the loans were subscribed by manufacturers of local consumable goods, waste recyclers and producers of goods for the tourism sector with 27 percent going to food manufacturing and processing firms and 13 percent to manufacturers of finished products, spare parts or assembly parts to supply other manufacturers. Eleven percent were enterprises in SME cluster zones and enterprises developing the cluster zones and research and development firms associated with information technology (IT) or the supply of IT-based services.
He said the SCFS programme is now successfully completed. Requests for new loans by SMEs will be processed by the respective PFIs under their own lending products and criteria.
Te Taing Por, president of the Federation of Associations of Small and Medium Enterprises of Cambodia (FASMEC), said he had not received any details on the loans, but he knows the fund is fully subscribed. He added that a smaller number of SMEs took advantage of the programme because many SMEs are still facing capital issues.
“I have no [knowledge of] the amount of money delivered to SMEs by the SME Bank. However, the interest rate is still high (7 percent per annum). Some commercial banks provide loans at 6 to 6.5 percent,” he added.
He also said that to assist more SMEs in the country, FASMEC is pushing SME cluster development in processing agricultural products for export to South Korean and Chinese markets.
Taing Por added FASMEC has also partnered with several banks, namely, Prince Bank Plc, Phillip Bank Plc and SBI LY HOUR Bank Plc to provide loans to SMEs with interest rates between 7 and 7.5 percent per annum.
Dexter, however, said that the SME Bank started it banking operation on Nov 5, 2020.
“Like many other commercial banks in Cambodia, we extend a broad range of banking services ranging from saving accounts, junior savings accounts, term deposit accounts to current accounts,” Dexter added.
On the credit facility side, he said the bank provides overdraft and term-loan facilities for working capital and capital expenditure. Besides that, the bank introduced a special loan product called the Cambodia SME Scheme (CSS).
He said the CSS is a product catering to SMEs during the COVID 19 pandemic period at affordable interest rates and preferential terms.
CSS is extended to both registered and unregistered businesses. However, unregistered businesses will be required to register within a period of six months to enjoy the preferential interest rate of not more than 6.88 percent per annum,” Dexter added.
He said SME Bank is committed to supporting SMEs especially in providing accessible and affordable financing. He added the SME Bank will be developing its own products to support SMEs under the Cambodia Industrial Development Plan.
“Another area of focus will be developing our digital capability to provide services to SMEs by developing a footprint via digital channels. We will also be engaging and collaborating with local and international bodies for improving access to finance for SME development in Cambodia,” he added.