Digitising payments could bring substantial cost savings for micro-, small-, and medium-sized enterprises (MSME), not only by simplifying cash management processes but also reducing potential opportunities for misappropriation or corruption, according to the central bank chief.
Speaking at the 9th Global SME Finance Forum in the capital last week, National Bank of Cambodia (NBC) governor Chea Chanto stressed that MSMEs play a crucial role in the world’s economies, particularly in developing countries.
He shared that in the Kingdom, MSMEs account for 99 per cent of enterprises nationwide, and contribute over 70 per cent to employment and 58 per cent to gross domestic product (GDP).
MSMEs are key drivers of “decent jobs”, entrepreneurship for women, and income generation for vulnerable populations, he said, adding that these smaller businesses contribute to inclusive economic growth, shared prosperity, sustainable production and consumption, and reductions in poverty and inequality.
“Despite their important roles and contributions to the economies, MSMEs continue to face many challenges, and one of the most critical issues is access to finance. Their challenges have been exacerbated by the impacts of the Covid-19 pandemic, especially in emerging and developing economies where MSMEs are mostly in the informal sector,” Chanto said.
Small businesses often have poor bookkeeping records and lack appropriate financial accounts and audited financial statements, leading many of them to be unserved or underserved by formal financial institutions, he added.
“The Covid-19 pandemic accelerated the digitalisation of payments. According to the latest Red Book Statistics from the Bank for International Settlement [BIS] Committee on Payments and Market Infrastructures, consumers have shifted from physical cash to digital and contactless payment instruments at a rate unprecedented since the start of the Red Book Statistics.
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Author: May Kunmakara
Source: The Phnom Penh Post
Publication date: 27 September 2022