The Association of Banks in Cambodia (ABC), with support from the International Finance Corporation (IFC), and National Bank of Cambodia (NBC) organized a virtual launch of the Factoring Handbook on February 28 to support business lending activities in the Cambodian market. The launching event was presided over by Mr. Heng Bomakara, First Deputy Director General of Banking Supervision of NBC.
Factoring plays a pivotal role in the world of finance, offering businesses invaluable solutions to manage their cash flow effectively. It’s a financial tool that enables companies to unlock the value of their accounts receivable, providing them with immediate access to much-needed working capital, said Mr Rath Sophoan, Vice-Chairman of the Association of Banks in Cambodia.
“Access to finance, particularly for small and medium-sized Enterprises (SMEs) and women entrepreneurs, is one of the agenda of the National Financial Inclusion Strategy 2019-2025. In the developed markets, financing against supply chain and movable assets is a way for financial institutions to support businesses,” Mr. Rath added.
In his opening remarks, Mr. Heng Bomakara, First Deputy Director-General of Banking Supervision of the National Bank of Cambodia, congratulated the International Finance Corporation (IFC), and ABC for their invaluable contributions, support, and efforts in developing this essential handbook for the Cambodian banking system. He added that the release of this factoring handbook marks a significant stride in propelling the supply chain finance market in Cambodia, which also serves as a vital platform to contribute to enhancing financial accessibility for MSMEs and fortifying value.
“To respond to the issue of lacking immovable assets like land or buildings of MSMEs, factoring service, a form of movable assets finance, emerges as a better option for MSMEs who are facing challenges in accessing credit due to the nature of their assets and business models. By opting for factoring, MSMEs can broaden their financing options and gain access to credit facilities without the need for immovable collateral,” said Mr. Heng.