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‘Unlocking the missing middle’ Give a Day talks investment readiness

Harrison White

Cambodia’s leading investors and entrepreneurial support organizations (ESOs) have joined to discuss and network ideas to improve the current level of ‘investment readiness’ in the local entrepreneurial and SME sector.

Cambodia’s ESO ecosystem, broadly defined as groups that support, train, and fund entrepreneurs is still in the nascent stage with many new organizations launched to help nature and develop the sector.

The attendees highlighted that investors, entrepreneurs & startups, and enterprise support organizations are often not in sync in terms of how each of them is defining investment readiness.

They added common complaints remain that there is often no constructive feedback loop for the entrepreneurs/startups on why they did not make the cut in securing funding, and what are the steps that they should take to address the investors’ requirements.

Give A Day and Unlocking the missing middle

During the workshop a panel discussion was moderated by Sokhuy Lay from SwissContact and included:

  • Somphyvatanak Kong, Market and Investment Manager at Khmer Enterprise
  • Laura Alsenas, Executive Director and Head of Funds from Nexus for Development
  • Ian Jones, Founder of Mekong Inclusive Ventures
  • Sophorn Kith, Investment Manager with Infunde Development

The panel explained their market positions and addressed the issue on the need to collaborate and coordinate across the efforts in filling the “missing middle” and unlocking capital.

To read more about the venture capital firm OBOR and Khmer Enterprise aim to lower SMEs lending and investment risk for financial institutions click here.

Speaking to Cambodia Investment Review Ian Jones Founder of Mekong Inclusive Ventures commented that it is critical that ventures not only become investment ready, but from the early stages understand what it means to be capital ready.

Give a Day
Ian Jones Founder of Mekong Inclusive Ventures speaks at a panel discussion.

“The ability to have internal processes, systems and planning – to be able to apply, receive and use capital. More importantly, it’s crucial enterprises understand the cost of money, the terms and conditions and more importantly, what you are giving up for it,” Jones added.

Mekong Inclusive Ventures focuses on creating impact enterprises that use a decentralized model to create impact and provide self-employment opportunities for marginalized communities, in particular people living with disabilities in Cambodia.

The importance of developing demand

The NGO sector has been previously criticized for failing to include actual investors in the development of Cambodia’s start-up community creating what has been described as ‘supply without demand’.

SMEs in Cambodia often face setbacks when applying for financing because they don’t have a clearly recorded financial history to prove their revenue and overall financial health, making lenders more hesitant to hand out loans. These lenders typically require collateral as well, but that may soon change.

Cambodia has been improving its business registration process due to a lot of work by the Ministry of Commerce and government over the past five years to improve digital registration and access to information.

However, managing a registered business is still considered complex and expensive such as submitting monthly tax returns and understanding tax compliance.

Give a day
Investors discuss common complaints and possible solutions during a breakout event.

The ‘Give a Day’ initiative was launched after a successful pilot program implemented with EuroCham in 2021 and is supported by Khmer Enterprise, USAID’s WE Act project through Pact, and Swissscontact.

This event was the second of 10 planned workshops designed to improve Cambodia’s entrepreneurial support organizations (ESO) network was held last week as development partners aim to better connect the local start-up ecosystem.

To read more about the first ‘Give a Day’ workshop please click here.

Developing the local start-up community is considered key for Cambodia to achieve its aims to reach upper-middle-income status (GNI per capita between $4,036 and $12,475) by 2030.

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