Canadia Bank Plc on Tuesday launched a new loan programme that will made a total of $150 million available to local small and medium-sized enterprises.
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Presiding over the launch of the scheme on Tuesday, Cham Prasidh, the Minister of Industry and Handicrafts, said the new financing made available to local firms will be important in helping Cambodia achieve sustainable economic growth.
“It will be a major element of our strategy to promote growth in the SME sector,” Mr Pradish said.
“It will reduce the number of challenges the financial sector faces and bring progress to the country, which is changing its economic structure, moving from a reliance on agriculture to a reliance on the industrial and services sector,” he said.
Mr Prasidh said that small firms are the backbone of the economy, and that the government is prioritising the development of the SME sector.
“Both the private and the public sectors are working together to transform the country into a middle-income country by 2030,” Mr Prasidh said.
However, Te Taing Por, president of the Federation of Associations for Small and Medium Enterprises of Cambodia, said the interest rates of the new loans were still high.
“What I know is that the interest rate is 7.8 percent per annum. In addition to other services, it can be as high as 9 percent, so it is still high for SMEs. It is still as high as that offered by other banks, so we would like to request Canadia to reduce it a little,” he said.
Mr Taing Por added that the biggest problems SMEs face when seeking financing are high interest rates and stringent collateral requirements.
Last year, Prime Minister Hun Sen announced that the government will establish a bank for SMEs to promote economic growth and generate more jobs. He said the bank will have an initial capital of $100 million.