The president of the Federation of Association of Small and Medium Enterprises of Cambodia (Fasmec) is urging small and medium-sized enterprises (SMEs) to register with the association to get benefits from the newly formed SMEs Bank of Cambodia.
Te Taing Por, President Fasmec told Khmer Times that SMEs are the country’s main engine for economic growth. He said that while the sector could make the country self-reliant, SMEs need to have more financial access to increase their production chains.
“Now we are urging them to register with us in order to meet loan conditions offered by the SMEs Bank of Cambodia because Fasmec is working with the bank to facilitate financial access,” he said, “we expect that next month we will get at least 1,000 applicants from SMEs.”
According to Por, Fasmec will provide registered members training and help to facilitate between SMEs and the bank. Currently Fasmec has more than 300 members registered with it.
The Cambodian government has put more effort into the SME sector, with the ministry establishing the SMEs Bank of Cambodia to help support access to working capital.
The SMEs Bank of Cambodia has a registered capital of $100 million and will provide an interest rate of 7 percent per annum.
Por said that the interest rate at 7 percent offered by the bank is small and could provide great benefits for SMEs to increase their production chains.
“We together need to help SMEs as the backbone of the local economy and it is good for our SME sector, especially food production,” he said. “It is good if imports are banned because, on this occasion, it will help us to increase our capacity and production chains by reducing the amount of imports.”
SMEs can borrow up to $200,000 for working capital and up to $300,000 for investment capital. The maximum interest rate is 7 percent per year and the repayment period is four years. The collateral is dependent on the criteria of participating financial institutions.
There are 32 financial institutions (23 commercial banks, and two specialised banks, five medium development institutes and two microfinance institutions participating in the government’s SME Co-Financing Scheme.
According to Por, so far, the fund announced by 34 commercial banks and MFIs reached to $97million, of which the largest amounts come from Price Bank ($10million), Canadian Bank ($25million) and Vattanak Bank ($20 million).