IFC: $4.2B unmet credit for Kingdom’s businesswomen
IFC: $4.2B unmet credit for Kingdom’s businesswomen
The International Finance Corporation (IFC), a member of the World Bank Group, has said Cambodian women entrepreneurs continued to struggle with limited access to financial loans for business expansions.
The IFC claimed in a report published last week that the prevalent belief that women entrepreneurs in Cambodia are less outgoing and have a lack of leadership skills and the required initiative to run a business is a misconception.
The report said 90 per cent of small and medium-d enterprises (SMEs) owned by women were profitable last year.
However, the IFC found that only three per cent of women entrepreneurs have access to formal credit from microfinance institutions and banks. It estimated that the unmet demand for credit from women entrepreneurs is currently $4.2 billion – a figure that’s equivalent to almost 63 per cent of Cambodia’s national buget of $6.7 billion for this year.
“Most women in the country use their funds to start a business or rely on informal sources and savings to expand their businesses,” the report said.
The study found that disparities in social gender norms and access to education in Cambodia continue to create a barrier for women in accessing markets and information, as well as causing other issues with operating businesses.
IFC regional director for East Asia and the Pacific Vivek Pathak said in the report: “They have no other choice. It is not easy for women to access banking services, and banks in Cambodia seem to overlook women entrepreneurial clients who are seeking loans to expand their businesses.”
The Cambodia Inter-censal Economic Survey 2014 shows there were 513,759 enterprises in the Kingdom that year, of which 97.6 per cent were micro-enterprises and 2.2 per cent SMEs.
Women-owned 26 per cent of SMEs and 62 per cent of micro-enterprises.
Ly Ly Food Industry Co Ltd director Keo Mom echoed the report’s comments. She said it is difficult for women entrepreneurs to obtain as good interest rates from banks as men.
“Women have difficulty borrowing from banks. Banks lack confidence in them,” she said.
National Bank of Cambodia director-general Chea Serey said during the launch of the report that gender discrimination remains the main challenge facing women-owned SMEs.
“Finance is an important tool for addressing gender equality and promotion across Asean and other regions,” she said, calling on banks and financial institutions to create products that can achieve gender balance in the economy.
Cambodia Post Bank CEO Toch Chaochek told The Post that his bank provides equal access to finance for both genders.
“Our banking policy is to provide loans for SMEs, not focus on whether [the applicant is] a woman or a man,” he said, adding that his bank offered a nine per cent annual interest rate to promote SMEs.
