ACLEDA Bank to continue its SME support across 2021
Dr In Channy, president and group managing director of ACLEDA Bank Plc, speaking with reporters following the bank's 2021 strategic implementation meeting in Siem Reap. KT/Sok Chan.
President and Group Managing Director of ACLEDA Bank Plc In Channy has announced that the bank has reserved nearly $600 million for lending to the small and medium enterprises (SMEs) sector in Cambodia in 2021.
Speaking to reporters following ACLEDA’s Strategic Implementation Year 2021 meeting in Siem Reap last week, Channy said that besides its direct lending programmes to SMEs, ACLEDA also participated with the SME Bank of Cambodia in the SME Co-Financial Scheme (SCFS).
The SCFS was capitalised at $100 million upon its launch on April 1, 2020. That capital was jointly funded by the SME Bank of Cambodia and 33 participating financial institutions (PFIs). The PFI group includes 24 commercial banks, six specialised banks and three microfinance institutions (MFIs).
He also noted that ACLEDA bank’s contribution to the SCFS was $23 million. “I think the Ministry of Economy and Finance will continue this scheme in order to inject funds into the SME sector by working with the participation of private financial institutions,” he said.
“If we look at the global economy in both developed and developing countries, SMEs are the engine that drives growth. When there are more SMEs, there are more jobs. SMEs support themselves and boost national growth by paying taxes. When SMEs are healthy, so is the economy” Channy added.
The SCFS fund was fully subscribed by mid-October 2020, four months earlier than anticipated, according to a senior executive of SME Bank of Cambodia, with the average loan granted being $122,514. The loan minimum was 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 are available to all small and medium enterprises (SMEs) excepting those in agriculture. He noted the SCFS fund has benefited 753 SMEs.
Channy added the banking sector was spared the devastation that much of the Kingdom’s businesses suffered by government measures in credit-regulations support including the capital-conservation buffer, the restructuring of loans, reserve requirements and the reducing of the liquidity coverage ratio (LCR). These actions relieved the burden on banks and MFIs so that they could in turn support other sectors.
“These measures resulted in the banking and finance sector having no need to inject more money into the market. We also have the avenue of borrowing from foreign partners with loan grace periods of up to 10 years. This allows our sector to support the SMEs which need long-term funding,” Channy added.
He said ACLEDA saw growth of 16 percent in its 2020 loan portfolio. Deposits increased by 15 percent over the same period.
Men Chakrya, owner of an ice-production business in Siem Reap province, said she has been borrowing from ACLEDA bank for her business expansion needs since 2008. She recently received a $200,000 loan to invest in solar panels for her production facility.
“With the bank’s loans, my business has been able to grow year-on-year and I have expanded my business to four branches in Siem Reap province,” Chakrya added. “I thank ACLEDA Bank for trusting that my business is credit-worthy,” Chakrya added.
Another businessman who borrows money from the bank, Reth Ry, owner of Reth Sory handicrafts, which sells agriculture machinery and steel in Siem Reap, said that with the bank’s having provided him loans, he has seen his business grow rapidly and it now employs 13 workers. Khmer Times
