Phnom Penh, March 25, 2022 – A conference on financial inclusion of women entrepreneurs in Cambodia, co-hosted by the UN Development Programme (UNDP) and the Credit Guarantee Corporation of Cambodia (CGCC), was held in Phnom Penh today to discuss existing challenges in financial inclusion and harness collective intelligence and knowledge on enhancing access to finance for women-led micro, small, and medium enterprises (MSMEs).

The event presented key findings from UNDP’s upcoming report on the ‘Cambodia Public Credit Guarantee Scheme for Small and Medium-Sized Enterprises and Women-Owned Small and Medium Enterprises’, which found that the main challenges for MSMEs to access finance are, in order of severity, the problematic requirement for collaterals as loan securities, stringent lending requirements which do not consider MSMEs business operation, high interest rates, short loan repayment periods, and weak MSMEs overall management capacity and keeping of quality financial and other supporting documentation. COVID-19 created additional difficulties for MSMEs, with 21.3% of surveyed enterprises reporting greater difficulty in accessing finance, especially among small and informal firms run by women in manufacturing, construction and real estate, and hospitality sectors.

The UNDP report estimates that a public credit guarantee scheme would have a significant positive impact on the country’s GDP and on job creation. Two main sectors were highlighted: agriculture and hospitality (i.e., hotels and restaurants). The report estimates that for every US$100 million invested in agriculture, an approximate $221 million would be generated as value added to the national inflation-adjusted or real GDP and 48,737 jobs would be created (17,348 for women). The return on investment from the hospitality sector was estimated at $201 million, with 16,226 potential jobs created (1,130 for women).

UNDP Cambodia’s Resident Representative Ms. Alissar Chaker emphasized “Women entrepreneurs are underserved by the financial system. Although, they own 61% of businesses in the country, only 3% of the nation’s women entrepreneurs have access to formal credit (WB, 2019)^[1]. Women-owned MSMEs are a great asset for post-pandemic recovery and future prosperity. A relevant public credit guarantee scheme would adjust credit market failures and access challenges by providing third-party credit risk mitigation to women lenders in case of loan default. It will also promote a more inclusive financial system and wider access which is not necessarily preconditioned by collaterals, often lacking or insufficient for women.

“UNDP and other development partners are supporting national efforts for accelerating socio-economic empowerment of women. Women entrepreneurs are encouraged to stay abreast of financial and non-financial services available in the market, including public guarantees, to make informed decisions and widen their options for financial accessibility,” said Ms. Chaker.

“Launched in early 2021, CGCC is tasked with the mission to provide a credit guarantee, and thus, to promote inclusive access to finance. From our portfolio, small and medium enterprises cover most of our guaranteed loans (96%). However, only 25% of all businesses that received loan guarantees are owned by women,” said Mr. Wong Keet Loong, CEO of CGCC. “CGCC’s new scheme, launched during the conference today, which is specifically designed for women led MSMEs owners aims to close the financing gap among women entrepreneurs and formal financial institutions.”

As part of the conference, women headed MSMEs shared their perspectives, challenges, and experience relating to access to finance. Participants could also connect with other peer business owners and participating financial institutions for networking, information-sharing possible future collaboration.

UNDP supports the Royal Government of Cambodia’s response and recovery efforts from COVID-19 through promoting inclusive and sustainable growth, responsive and strong institutions, social protection, digitalization, e-commerce acceleration, and resilience to climate risks, while leaving no one behind.

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For media inquiries, please contact Mr. Im Samruol, UNDP Cambodia’s Head of Communications, at samruol.im@undp.org.

Khmer Press Release

^[1] World Bank (2019). Exploring the Opportunities for Women-owned SMEs in Cambodia.