The government has set aside $250 million for direct loans from two state-owned banks next year, to assist local small- and medium-sized enterprises (SME) in navigating through the “new normal”, according to Ministry of Economy and Finance secretary of state Phan Phalla.

These are the Small and Medium Enterprise Bank of Cambodia Plc (SME Bank) and the Agricultural and Rural Development Bank of Cambodia (ARDB).

Speaking at a press conference at the Council of Ministers, or Cabinet on December 14, Phalla noted that the two banks, along with other financial institutions, have supported a tonne of smaller businesses with loans at competitive interest rates, through two phases of the SME Co-Financing Scheme (SCFS) of SME Bank.

He said Phase II was launched earlier this year, following the successful subscription of the first phase that was rolled out last year, each of which was backed by a $50 million fund from SME Bank.

“[SCFS] has facilitated a lot of conditions for them [SMEs] to get these loans, because we know that they have been facing a lot of difficulties for more than a year.

“But the financing is not a gift without a repayment requirement, although we will do our best to facilitate the conditions to help the sector,” Phalla said.

Federation of Associations for Small and Medium Enterprises of Cambodia (Fasmec) president Te Taingpor said the $250 million would be a vital source of capital to prop up local SMEs, and could potentially cushion the private sector against Covid blows.

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Author: Hom Phanet

Source: The Phnom Penh Post

Publication date: 14 December 2021