Cambodia Collaborates with ADB to Strengthen Small and Medium Enterprises
In a significant development for Cambodia’s economic sector, the Foreign Trade Bank of Cambodia (FTB) has aligned with the Asian Development Bank (ADB) through the Trade and Supply Chain Finance Program (TSCFP). This partnership, finalized on Tuesday in Phnom Penh, aims to enhance trade finance opportunities for Cambodia’s micro, small, and medium-sized enterprises (MSMEs).
The formalization of this collaboration was marked by the signing of the agreement by Dith Sochal, Chief Executive Officer of FTB, and Jyotsana Varma, ADB’s Country Director for Cambodia. This initiative is strategically designed to propel Cambodia’s economic growth by fostering greater involvement of the private sector, particularly focusing on the MSME segment, which constitutes roughly 99% of all business entities within the country.
Varma highlighted the strategic importance of this alliance, noting that it seeks to bridge existing market deficiencies by facilitating access to finance for trade and MSMEs through partnering financial institutions. The FTB’s integration into the TSCFP as a partner bank will enable the institution to extend its support to both corporate entities and MSMEs in Cambodia. This will be achieved by allowing trade finance instruments issued by FTB to be safeguarded by TSCFP credit guarantees. Such measures are anticipated to attract a broader spectrum of international banking participants to the Cambodian market, thereby enhancing trade finance availability.
Sochal shared insights into the pre-existing collaboration between FTB and the ADB’s program, emphasizing the benefits reaped in terms of enhanced knowledge and expertise in trade facilitation. He pointed out that the program has been instrumental in strengthening FTB’s capabilities in various domains including report generation, adoption of best practices, formulation of innovative strategies, development of training modules, and evaluation of performance metrics.
The TSCFP, since its inception, has extended its support through loans and guarantees to over 200 partner banks across numerous countries, thereby catalyzing trade activities that contribute to economic expansion. This program has facilitated an impressive $57 billion in trade across more than 45,000 transactions within emerging markets, showcasing its significant impact on global trade dynamics.
Source: Khmer Times
