Cambodia’s Small Businesses Serve as Backbone of Sustainable Economy
Cambodian Prime Minister Hun Sen announced in late March that the nation was on target to move from the status of a low-income to a lower-middle-income nation by the end of 2013, ranking it the 15th country that obtained high economic growth in the world in the last 10 years. …
Historically, however, Cambodia has relied on the role of small- and medium-sized enterprises (SMEs) as the backbone of a sustainable economy. Generally in Cambodia when we talk about SME economic activities, we are in fact talking about micro-small and medium-sized enterprises (MSMEs), as out of the more than 500,000 economic establishments or enterprises counted in the 2011 Cambodia Economic Census, some 493,000 of them employ only one to 10 employees. …
Growth in the number of MSMEs could help expand the economy, create more jobs, facilitate Foreign Direct Investment, and enlarge the tax collection base. The 2011 census shows that more than 500,000 economic establishments were engaged in economic activities, employing more than 1.6 million laborers or approximately 20 percent of the total Cambodian labor force. …
According to the National Institute of Statistics (NIS), around 72 percent of Cambodian enterprises are family-run businesses with one to three employees (2009). Out of 505,134 enterprises, only 3.5 percent were registered at the Ministry of Commerce in 2011. This means that the majority of enterprises are in the informal sector, effectively preventing them from accessing finance because banks and monetary financial institutions require SMEs to have legal status to be eligible to apply for a loan. …
