ADB and Cambodia Post Bank sign $10M loan to support recovery of MSMEs from pandemic

MSMEs account for 99.8% of all enterprises in Cambodia and employ upwards of 72% of the labor force.

The Asian Development Bank (ADB) and Cambodia Post Bank (CP Bank) signed a loan of up to $10 million to support the recovery of micro, small, and medium-sized enterprises (MSMEs) in Cambodia from the COVID-19 pandemic by expanding their access to finance. At least 50% of the proceeds are marked to finance MSMEs led by women.

“Improving MSMEs’ access to working capital and longer term financing has considerable benefits, not only for their growth but also for job creation and broader economic recovery,” said ADB Vice-President for Private Sector Operations and Public–Private Partnerships Ashok Lavasa. “This financing will support the profitability of these businesses by improving their competitiveness and giving them access to domestic and international production networks.”

MSMEs account for 99.8% of all enterprises in Cambodia and employ upwards of 72% of the labor force. Cambodian MSMEs have limited access to finance, with less than 20% of unregistered enterprises acquiring a loan or a line of credit from a financial institution. Most of them are owned by women. The challenges facing female entrepreneurs are particularly acute, with fewer than 5% having access to formal credit.

“CP Bank has prioritized the development of financing for MSMEs to help them grow and evolve so they can create more jobs and expand their contribution to the broader economy. The assistance from ADB will help us to provide additional financial products and services to these underserved businesses while supporting their working capital and investment needs,” said CP Bank CEO Toch Chaochek.

ADB will help CP Bank to incorporate gender equality and women’s empowerment into its business activities through the development of a gender action plan and the appointment of a staff-level gender focal point.

Since joining ADB in 1992, Cambodia has received over $4.7 billion in sovereign and nonsovereign loans, guarantees, and technical assistance for agriculture, irrigation, finance, transport, energy, and water supply and sanitation among others. ADB’s support is closely aligned with the country’s development priorities. Recent ADB assistance has helped to mitigate the impacts of COVID-19 and strengthen access for women, particularly in provinces. ADB has also supported public–private partnerships and private sector renewable energy projects in Cambodia. 

Based in Phnom Penh, CP Bank provides financial services to MSMEs and retail consumers with a focus on middle-lower-income and emerging middle-income segments. It has the country’s fifth-largest branch network and serves more than 258,600 customers in urban and rural areas.