Country aims to open financing frontiers for women entrepreneurs
Country aims to open financing frontiers for women entrepreneurs
Cambodia aims to boost financial inclusion for women entrepreneurs through Credit Guarantee Corporation of Cambodia Plc (CGCC) and support for women-led micro, small- and medium-sized enterprises (MSME) as part of broader efforts to bridge financing gaps for businesswomen and underpin Covid-19 economic recovery plans.
“A conference on financial inclusion of women entrepreneurs in Cambodia, co-hosted by the UN Development Programme [UNDP] and the [CGCC], was held in Phnom Penh [on March 25] to discuss existing challenges in financial inclusion and harness collective intelligence and knowledge on enhancing access to finance for women-led [MSMEs],” the UNDP said in a statement.
The main findings of the UNDP’s upcoming report on the “Cambodia Public Credit Guarantee Scheme for Small and Medium-Sized Enterprises and Women-Owned Small and Medium Enterprises” were presented at the event, the March 25 statement said.
The report “found that the main challenges for MSMEs to access finance are, in order of severity, the problematic requirement for collaterals as loan securities, stringent lending requirements which do not consider MSMEs business operation, high interest rates, short loan repayment periods, and weak MSMEs overall management capacity and keeping of quality financial and other supporting documentation”, it added.
UNDP Cambodia resident representative Alissar Chaker said in the statement that “women entrepreneurs are underserved by the financial system”.
“Although they own 61 per cent of businesses in the country, only three per cent of the nation’s women entrepreneurs have access to formal credit,” she said, citing a 2019 World Bank report.
“Women-owned MSMEs are a great asset for post-pandemic recovery and future prosperity. A relevant public credit guarantee scheme would adjust credit market failures and access challenges by providing third-party credit risk mitigation to women lenders in case of loan default.
“It will also promote a more inclusive financial system and wider access which is not necessarily preconditioned by collaterals, often lacking or insufficient for women.
“UNDP and other development partners are supporting national efforts for accelerating socio-economic empowerment of women. Women entrepreneurs are encouraged to stay abreast of financial and non-financial services available in the market, including public guarantees, to make informed decisions and widen their options for financial accessibility,” she added.
CGCC CEO Wong Keet Loong said: “Launched in early 2021, CGCC is tasked with the mission to provide a credit guarantee, and thus, to promote inclusive access to finance. From our portfolio, small and medium enterprises cover most of our guaranteed loans [96 per cent].
“However, only 25 per cent of all businesses that received loan guarantees are owned by women.
“CGCC’s new scheme, launched during the conference today, which is specifically designed for women led MSMEs owners aims to close the financing gap among women entrepreneurs and formal financial institutions,” he said.
The statement added that the “report estimates that a public credit guarantee scheme would have a significant positive impact on the country’s GDP [gross domestic product] and on job creation. Two main sectors were highlighted: agriculture and hospitality – that is hotels and restaurants”.
“The report estimates that for every $100 million invested in agriculture, an approximate $221 million would be generated as value added to the national inflation-adjusted or real GDP and 48,737 jobs would be created – 17,348 for women.
“The turnover on investment from the hospitality sector was estimated at $201 million, with 16,226 potential jobs created – 1,130 positions for women,” the UNDP added.
