Gov’t Adds More $100M to Support SMEs and Agriculture Sector

Gov’t Adds More $100M to Support SMEs and Agriculture Sector

The government has allocated $100 million to support small and medium enterprises, agriculture and agro-industry sector enabling them to make their business recover from the pandemic-stricken period.

The budget is the special emergency loan that the government provides to the private sector through two state-owned Agricultural and Rural Development Bank and SME Bank.

The fund was announced officially in a ceremony held on yesterday in the presence of Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance, who joined virtually.

Speaking at the function, Pornmoniroth said that the $100 million package is to support the recovery of economic growth after the Covid-19 crisis, which is part of the recovery of Cambodia’s economic growth in the near future, especially to promote the implementation of the strategic framework and programmes to restore and promote the growth of Cambodia’s economy to live with Covid-19 in the new normal path for 2021-2023.

The fund has been recently approved and announced by the government.

Strategic framework and programmes to restore and promote Cambodia’s economic growth in living with Covid-19 in the new normal path for 2021-2023 is aimed to restore Cambodia’s economic growth in the near and medium-term to return to the path of potential growth and strengthen resilience
for long-term sustainable socio-economic development and the environment.

“The $100 million budget will be used to boost agriculture and small and medium enterprises, two of the most important sectors in the national economy, both in terms of job creation and in improving people’s livelihoods and promote national economic growth,” he added.

The additional funds will be split into two sections, with $50 million for the Agriculture and Rural Development Bank and $50 million for the SME Bank to be used to support the activities of SMEs in need and to support Cambodia’s rice sector, animal husbandry, crop production, as well as to support risk-sharing co-financing mechanisms with banks and financial institutions.

The Cambodian government considers the promotion of the development of small and medium enterprises, particularly SMEs in key sectors such as agriculture, agro-industry, food processing, components, tourism, as an important policy priority.

The SMEs account for about 98 percent of all businesses in Cambodia and contribute about 58 percent of GDP and employ about 73 percent of the total labour force in Cambodia

“Small and medium enterprises not only contribute to supporting Cambodia’s economic growth and job creation but also play an important role in building the resilience of the national economy to the crisis,” he said.

Te Taing Por, president of the Federation Association for Small and Medium Enterprises of Cambodia, said yesterday that the fund is enabling SMEs to access finance. “We are in the private sector welcome to the move because SMEs need finance access to continue and expand businesses,” he said.

In 2021, the government initiated the first phase of a co-financing programme through SME bank in collaboration with relevant institutions in the total amount of $100 million, in which the government contributed $50 million and the rest were from private financial institutions.

The second phase was started in August 2021 with a budget of $150 million of which more than $70 million was contributed to the government and another was contributed by financial institutions. Khmer Times