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SME environment lacking in Cambodia, study says
A report by the United Nations Technology Bank for Least Developed Countries found that while the small to medium-sized enterprise (SME) business climate in Cambodia is improving, more synergy needs to be created within industry and more programmes introduced to support women-led enterprises, especially in tech-related fields.
The study drew on interviews from experts in the industry and representatives from the private sector and the government.
It’s expected developing SMEs, pushing digitalisation and empowering women economically will be a main driver in ensuring this transition is a success, according to the report.
For example, in Cambodia, the available jobs pool is not large or skill-oriented enough to support the country’s young tech-savvy population. They require higher-skilled jobs, something that could be created through the prioritised development of entrepreneurs and SMEs.
According to the report, 90 percent of firms worldwide are SMEs and they account for 60 percent of employment.
In Cambodia, the report said the Entrepreneurship Development Fund (EDF) implemented by the government in 2019 has been one of the bright spots in the country’s efforts to help grow SMEs.
The government budgets $5 million annually to the fund, which focuses on capacity building, upgrading SMEs, networking and mentoring, promotion of entrepreneurial culture and seed funding.
The report mentioned Khmer Enterprise, a government entity that acts like a private firm by investing in companies as well as providing mentorship and networking opportunities to entrepreneurs, as another example of forward-thinking government initiatives.
In Cambodia, the government is making it a priority to register informal SMEs. A 2011 economic census cited by the report found that only about 3.5 percent of Cambodian businesses are fully registered.
Women entrepreneurship has been championed by organisations such as USAID, Japan International Cooperation Agency (JICA) and Australia’s Department of Foreign Affairs and Trade, but the report noted that women-inspired initiatives are noticeably lacking in government policy.
In the private sector, incubators and accelerators such as Small World Ventures and Impact Hub Phnom Penh have taken the lead in empowering entrepreneurs by offering seed money.
Support for startups further along the development stage has materialised as well from Impact Hub and Energy Lab, an incubator focused on green businesses.
Access to finance was listed as a major concern for the growth prospects of SMEs, although more programmes have cropped up recently in an effort to help lift companies out of the pandemic-induced downturn.
The report also cited gender bias as a major problem in financing in Cambodia. The Asian Development Bank has been an exception and has made it a priority to extend financing to women-led enterprises, the report said.
The World Bank’s Doing Business initiative, cited sluggish registration times and a lack of clarity concerning taxes as factors in its ranking the Kingdom 187th out of the 190 countries covered in its survey
Source: https://www.khmertimeskh.com/50855988/sme-environment-lacking-in-cambodia-study-says/