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Thursday, May 29, 2014

ADB To Support MSMEs in Cambodia

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AKP Phnom Penh, May 28, 2014 –

The Asian Development Bank (ADB) today signed a US$75 million senior loan with ACLEDA Bank Plc, to address the rising financing requirements of micro-, small-, and medium-sized enterprises (MSMEs) in the country, according to an ADB’s press release.

“The assistance will enhance MSME access to longer-term finance, which in turn is critical to support poverty alleviation through income and employment generation in rural areas where about 90 percent of Cambodia’s poor live,” said Ms. Christine Engstrom, Director in ADB’s Private Sector Operations Department.

MSMEs account for 99 percent of private companies and 73 percent of all jobs in Cambodia, but they have very limited access to bank financing, it said.

According to the country’s central bank, 84 percent of MSMEs are financed through the informal financial sector, where interest rates can go as high as 10 percent per month, it added.

ACLEDA, which has an extensive branch network in rural areas, will use the loan to broaden its lending base and extend its services to the underserved communities, including the use of its successful mobile banking platform. ACLEDA has been a nongovernmental organization since 1992.

ADB will provide stable, long-term financing that currently cannot be raised from the local market and is needed to help the bank address the maturity mismatch on its balance sheet, said the press release, stressing that the assistance will also allow ADB to deepen its relationship with the bank, which also has a presence in the Lao People’s Democratic Republic and Myanmar, and strengthen the potential for ADB to help promote financial inclusion in these other challenging markets.

By Neou


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