H.E. Ros Seilava, Chairman of Credit Guarantee Corporation of Cambodia
H.E. Keo Mom, President of Cambodia Women Entrepreneur Association
Mr. Heng Bomakara, Deputy Director General of Banking Supervision, National Bank of Cambodia
Distinguished speakers, entrepreneurs, and participants
Excellencies, ladies, and gentlemen.

A Very Good Morning to all.

I would like first to welcome you to the First Cambodian Women Entrepreneurs Financial Inclusion Conference. I am very glad to co-host this conference with the Credit Guarantee Corporation of Cambodia (CGCC) and pleased to note the participation of so many key actors promoting inclusive access to finance for Micro, Small and Medium Enterprises (MSMEs).  

Access to finance and risk-sharing open various opportunities for businesses, especially micro and small businesses. They allow start-ups and MSMEs to grow, support business continuity and expansion, and encourage innovative businesses with high social returns. This in turn, contributes to social and economic well-being, and diversified and resilient national economies, encouraging job creation and much of the creative and innovative entrepreneurship that fuels economic progress, reduces inequality, promotes competition and cooperation, and increases the productive potential and value-addition.

COVID-19 exposed MSMEs, which account for 99.8% of all enterprises in Cambodia[1], to many challenges. Borders closure and movement restriction had a dramatic impact on many productive and service sectors, and related value chains. Many had to permanently shut down because of financial losses. Research and experience have shown that women owned MSMEs are more vulnerable due to limited access to finance. Allow me to highlight three key findings from our study in 2021 on “Cambodia Public Credit Guarantee for MSMEs and Women-owned MSMEs: The Potential Support to the Speedy Economic Recovery from COVID-19 Pandemic”.  718 MSMEs were interviewed in five main provinces, namely Phnom Penh, Kandal, Kampong Cham, Battambang and Siem Reap.  Key insights included:

• 21.3% of total surveyed MSMEs reported having greater difficulty in accessing loans especially among small and informal businesses run by women in manufacturing, construction and real estate, and hospitality sectors. 19.8% of men and 22.0% of women owners/managers, respectively, reported having great difficulty in access to loans. Informal businesses, dominated by women, could neither access government support.
• 79.1% of total surveyed MSMEs reported that collaterals are the most challenging requirement for access to finance, followed by financial institutions’ stringent lending requirements (58.8%), and high interest rates (39.6%). It is worth noting that land, buildings, and houses are the most common collaterals used. Women often do not have access to these types of collaterals. Other forms of collaterals such as movable assets are of limited use.
• Women-led businesses were more severely affected by the COVID-19 shock compared with businesses led by men. During COVID, 14.3% of the surveyed MSMEs reported increase in debt. Comparatively, 16.5% of women owned MSMEs versus 10.2% of men owned MSMEs.

Banks and microfinance institutions could do more to further access to finance through innovative financial products tailored to women entrepreneurs’ specific needs and reducing associated risks. Supporting women business owners to access finance means supporting a financial system that leaves no one behind. This is where a credit guarantee scheme is crucial for financial inclusion, especially for COVID-19 recovery, while sharing the risk with participating financial institutions.

The above-mentioned study estimates, using macroeconomic modelling, that extending public credit guarantee to priority sectors impacts positively GDP and employment creation. For instance, every US$100 million invested in agriculture would generate about US$280 million addition to GDP and will create more than 48 thousand jobs, of which 36% for women. Likewise, the return on GDP from the US$100 million investment in the hospitality sector generates US$201 million in value added to GDP and more than 16 thousand jobs of which 7% new jobs for women. 

Excellencies, ladies, and gentlemen,

The Royal Government of Cambodia launched, in December 2021, the Strategic Framework and Programs for Economic Recovery in the Context of Living with COVID-19 in a New Normal 2021-2023. The framework reflects the Government’s commitment for supporting MSMEs, especially for improving their access to finance and creating more opportunities for them to grow.

UNDP Cambodia responded to the call. As such, UNDP is implementing with UNCDF, the Ministry of Economy and Finance and the Credit Guarantee Corporation of Cambodia a Joint Programme on “Unlocking Cambodian Women’s Potential through Fiscal Space Creation”. The joint programme supports policy formulation, and the development and roll-out of a credit guarantee facility that would provide low-cost and reliable financing to women-headed MSMEs. Today’s conference is part of this initiative. Working closely with Credit Guarantee Corporation of Cambodia and other UN agencies, I am looking forward to the launching of the Women Entrepreneurs Guarantee Scheme, in sectors such as digital innovation and ICT, and green jobs.

Women-led MSMEs are encouraged to keep abreast of information on financial products and services, so that they can make informed decision and enhance their financial accessibility.

UNDP is currently training women entrepreneurs and developing needed skillsets for accessing finance and managing the impacts of the pandemic. A web-based interactive platform is under-development and will be publicly accessible.

On the other hand, in partnership with the Ministry of Commerce and the Enhanced Integrated Framework (EIF), UNDP is supporting the development of the e-commerce ecosystem and E-commerce Acceleration (Go4eCAM project) for empowering MSMEs and small-holder farmers to adopt digital solutions and marketing their products online. Women entrepreneurs are an integral part of the project partners for economic empowerment.

UNDP recognizes the importance of inclusive growth and the crucial role of women entrepreneurs for future prosperity. We encourage financial institutions to join forces with the credit guarantor, the Credit Guarantee Corporation of Cambodia, for improving financial inclusion of women entrepreneurs and invite experts, experienced entrepreneurs and development partners present today to identify together feasible solutions and recommendations for accelerating financial inclusion for women, hoping that today’s conference succeeds in leveraging the rich collective intelligence.

I wish you a good continuation and fruitful deliberations.

Thank you!

[1] MSMEs account for 99.8%, of which 97.6% are Micro and 2.2% are SME. Ref. Latest Cambodia Inter- Censual Economic Survey, CIES 2014.