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Three Associations joint effort to promote Financial Literacy to Young Entrepreneurs and Small and Medium Enterprises in Cambodia

The Association of Banks in Cambodia (ABC), the Cambodian Microfinance Association (CMA) and the Young Entrepreneurs Association of Cambodia (YEAC) on September 16 signed a Memorandum of Agreement (MoA) to jointly promote financial literacy and financial inclusion among young entrepreneurs and Small and Medium Enterprises in Cambodia.

The virtual signing ceremony was organized via Zoom and attracted 260 participants from young entrepreneurs, owners of Small and Medium Enterprises, Bankers and MFIs practitioners. The event was also live streamed via the official Facebook page of all three associations.

The Memorandum of Agreement between the three associations was established with the aim of strengthening and expanding cooperation related to training, events and joint workshops to enhance financial literacy, Fintech, inclusive credit services, as well as to build social networks among Cambodian young entrepreneurs and Small and Medium Enterprises in Cambodia.    

The signing ceremony was also accompanied by a special discussion forum on “COVID-19 BUSINESS RECOVERY PATHWAYS on the Financial Institutions Perspective”.The discussion mainly focused on strategies and behaviors on how banks and financial institutions implement support for the Micro, Small and Medium Enterprises (MSMEs) affected by the Covid-19 pandemic.

Speaking at the MoA ceremony, Dr. In Channy, Chairman of the Association of Banks in Cambodia said that with this MOA, all relevant parties would continue to strengthen the financial literacy to the public, entrepreneurs and other Small and Medium Enterprises (SMEs). The cooperation between the three associations is reflected in the National Strategy for Financial Inclusion 2019-2025 to promote financial literacy among entrepreneurs, small and medium businesses, farmers as well as young entrepreneurs. Additionally, this cooperation would be a platform for all experts from banking and financial industry players and entrepreneurs as well as small and medium enterprise owners to discuss and find win-win solutions.

He continued, “Small and Medium Enterprise (SMEs) are the backbone of Cambodia’s economy and have made significant contributions to the gross domestic product (GDP) as well as employment opportunities for Cambodian people. Recently, the Ministry of Economy and Finance, through SME Banks of Cambodia Plc. Launched the SME CO-FINANCING SCHEME II in 2021 with a total 26 of participating financial institutions. This SME CO-FINANCING SCHEME II has a total reserved fund of over USD 160 million to support all Small and Medium Enterprises to have easy and flexible access to finance as well as provide reasonable interest rates to increase financial diversification.

Taking this opportunity, Mr. Kea Borann, Chairman of Cambodia Microfinance Association (CMA), said that the cooperation between the three associations is significant for the development of the microfinance sector in Cambodia to support entrepreneurs, particularly young entrepreneurs, by participating in promoting access to a wide range of financial services and products with highly responsible manner. He confirmed, “The cooperation between the three associations would be also a special forum for financial experts and young entrepreneurs to study, explore, create, test and implement the innovative solutions to promote business development in Cambodia.”

Mr. Seang Sopagna, President of Young Entrepreneurs Association of Cambodia, also pointed out that an inadequacy of access to finance is often mentioned by the members of the Young Entrepreneurs Association of Cambodia and particularly the Micro, Small and Medium Enterprises in Cambodia as a major bottleneck for growth and vibrancy of entrepreneurship in Cambodia. Most recurring cause of limited access to finance are a lack of collateral, high interest rates, the absence of financial statements and a general lack of information on sources of debt financing”

He added, “Access to Debt & Equity Financing is the 1st priority strategic 2025 in addition to other 5 priorities of YEAC. Based on our experiences working with Small and Medium Enterprises, collateral is always a major factor for making a loan decision; however, having adequate financial knowledge and sufficient documentation are also essential.        

Mr Sopagna continued, “The MoA today is an essential milestone in our partnership, and sets out key strategic areas of cooperation between our associations on matters of mutual interest relating to the training, workshop, events, guest speakers for online talk show program and the access to finance among Cambodian young entrepreneurs.” He added, “ We will also work jointly on matters of gender equality, green and sustainable, socially responsible business initiatives promotion and awareness, financial literacy, technology and entrepreneurship-oriented events and efforts.”