MSME sector expands amid economic growth rate of 6%

MSME sector expands amid economic growth rate of 6%

As Cambodia’s economy recorded a 6% growth rate in 2024, the government registered nearly 1,300 new Micro, Small, and Medium Enterprises (MSMEs), bringing the total number of MSMEs across the country to nearly 44,000 and employing over 476,200 workers, according to official data.

The figures were revealed during the “2024 Review and 2025 Planning Conference” hosted by Hem Vanndy, Minister of Industry, Science, Technology & Innovation (MISTI), at Sokha Phnom Penh Hotel.

The two-day event, which commenced on Tuesday, gathered approximately 600 representatives from government institutions, the private sector, and development partners to review the ministry’s achievements, challenges, and strategic priorities for the year ahead.

According to a MISTI report obtained by Khmer Times, 1,292 MSMEs were registered in 2024. However, despite the sector’s expansion, 1,950 enterprises shut down, resulting in a workforce reduction of 13,576 jobs.

The report detailed that central-level registrations accounted for 17 enterprises, while 338 businesses were registered through the IT system, 831 through provincial and municipal departments, and 106 through local district and municipal offices. Additionally, 1,052 operating licences and 1,338 renewal certificates were issued, creating 25,833 new jobs.

By the end of 2024, Cambodia had a total of 43,970 MSMEs, including 8,325 women-led enterprises, employing 476,223 workers, of whom over 140,000 were women. The ministry noted that these figures will be continuously updated as new data becomes available.

Nhim Khemara, Permanent Secretary of State at MISTI, highlighted the working plan for 2025, presenting recommendations focused on policy development, investment attraction, digital transformation, and industry sustainability during the ministry’s annual review and planning conference.

Among the key initiatives for 2025 is the finalisation of the draft sub-decree on the establishment and management of SMEs Cluster, aimed at fostering collaboration between local enterprises and attracting foreign direct investment (FDI). The ministry will also continue implementing the SMEs Go Digital Supporting Hubs initiative, designed to enhance digital adoption and entrepreneurship among small businesses.

To boost local industry, MISTI will strengthen the capacity of SMEs in quality standards, safety, innovation, and product diversification, working closely with development partners. Additionally, the ministry plans to reinforce salt production management in Kampot and Kep provinces and update regulatory frameworks for standardisation and business registration.

Other major priorities include promoting online SME registration, enhancing public-private partnerships, encouraging domestic raw material processing, and ensuring food quality and safety standards. The ministry will also push for digital payment adoption via KHQR and prepare SMEs for regional free trade dynamics as Cambodia transitions to a higher-income country by 2030.

In addition, the total investment in 2024 exceeded $20.45 billion, marking an increase of over $1.89 billion or 10.18% compared to 2023, according to the report.

The report highlighted that domestic investment amounted to $3.96 billion, accounting for 19.37% of the total investment. Meanwhile, the total value of implemented gross production in 2024 was over $15.14 billion, reflecting a decrease of more than $1.21 billion or 7.43% from the previous year.

The report further noted that the value of domestic market-oriented production stood at $3.89 billion, a decline of $233 million or 5.65% compared to the same period in 2023. Additionally, the value of exports dropped to $11.25 billion, a decrease of $982 million or 8.03% year-on-year.

Speaking at the opening ceremony, Vanndy said: “The conference offered a vital platform for MISTI’s management, civil servants, representatives from relevant ministries-institutions, private sector, and development partners to engage in discussions, share experiences, jointly evaluate and set directions for successful, effective and efficient implementation in 2025.”

MISTI has a broad mandate to lead and manage the development of key sectors, including industry, SMEs and handicrafts, water supply, national quality infrastructure and national productivity, science, technology and innovation (STI), and the informal economy.

“Despite ongoing challenges in the global economy, Cambodia is capable of maintaining macroeconomic stability, continuously attracting investment to establish factories and enterprises that promote export-led growth,” he said.

In 2024, the Cambodian economy achieved a growth rate of approximately 6%, with projections indicating a growth of 6.3% in 2025. The industrial sector contributed around 8.5% in 2024, with a forecasted growth of about 8.6% in 2025.

During the first day of the conference, representatives from ministries-institutions, the private sector, development partners, and relevant stakeholders discussed the overall theme of industrialisation, emphasising the expansion beyond the garment and textile sectors to other non-traditional industries.

Discussions also addressed the need for Cambodia to prepare for its graduation from Least Developed Country (LDC) status in late 2029 and to build a resilient economic base to navigate the challenges of the middle-income trap.

Conference participants also discussed six strategic, cross-sectoral topics: promoting manufacturing and industrial backward linkages; accelerating the water supply sector to meet the 2030 Sustainable Development Goals (SDG6); strengthening national quality infrastructure and productivity; supporting the development of micro, small, and medium-sized enterprises (MSMEs) and entrepreneurship; reforming public services and advancing digitalisation, statistics and data building; and science, technology, innovation (STI) and intellectual property.

Vongsey Vissoth, Permanent Deputy Prime Minister, Minister in Charge of the Office of the Council of Ministers, esteemed representative of Prime Minister Hun Manet, presided over and delivered a keynote address for the conference’s closing ceremony yesterday.

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