Cambodia’s Entrepreneurial Ecosystem Strengthening Conference 2022 (CAMESCO), the first of a series of annual conferences, has been successfully organized by Khmer Enterprise, USAID via Pact, GIZ, and Swisscontact with around 150 participants from close to 100 institutions and organizations.
CAMESCO is an initiative within the Entrepreneurship Ecosystem Building (EEB) Project, jointly funded by Khmer Enterprise, established by the Ministry of Economy and Finance in Cambodia, USAID’s WE Act Project through Pact Cambodia, and Swisscontact.
Aside from CAMESCO, there are two main initiatives within EEB, Give a Day and Ecosystem Builders Network (EBN). The Give a Day monthly meetings and quarterly ecosystem builder events have been greatly welcomed by Cambodia’s entrepreneurial community – and have provided both learning and networking opportunities between various sectors.
The quarterly meetings created a space through which ecosystem builders and government agencies can share information, foster best practices, identify market gaps and opportunities and explore collaboration or complementarity to strengthen the ecosystem.
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.
Promoting a vibrant entrepreneurial ecosystem in Cambodia
H.E. Dr. Chhieng Vanmunin said that “Serving as a national platform for promoting a vibrant entrepreneurial ecosystem in Cambodia, Khmer Enterprise hopes this program serves as a platform in supporting the ecosystem stakeholders to meet and leverage this network for further collaborations that will complement each other and build a more resilient and diverse ecosystem.
“The Entrepreneurship Ecosystem Building program is not about replicating what is working, it is about discovering new components that are missing in the ecosystem, and most importantly able to deliver and address those challenges,” he added.
Cambodia’s start-up sector is aiming to become an attractive destination for both local and international investors as the sector aims to formalize and grow the government-backed support fund Khmer Enterprise and Dr. Chhieng Vanmunin is ready to help.
Khmer Enterprise, which operates under the Ministry of Economy and Finance, was launched in 2019 as a government-funded program in line with Cambodia’s Rectangular Strategy IV.
CAMESCO aims to build a network with like-minded stakeholders to strengthen Cambodia’s entrepreneurship and investment ecosystem. This allows for showcasing the best practices in promoting collaboration and trust building and fostering an entrepreneurship culture among ESOs and system actors. CAMESCO is envisioned as a regular annual conference for all the ecosystem actors to strengthen deal flows in Cambodia.
Identify gaps and build on the strengths
Ms. Sabine Joukes, Country Director of Pact Cambodia said: “We jointly brought all the ecosystem actors together, so we can learn from each other, understand the needs of the MSME’s better so actors can strengthen their services, identify gaps and build on the strengths that are already there.
“WE Act with support from USAID, focuses on Women Entrepreneurs and ensures that their needs are heard and addressed. We have already seen the impact of bringing the ecosystem actors together and look forward to continuing improvements for the benefit of entrepreneurs,” she added.
According to a report by the International Labour Organization estimates approximately 90% of those who are employed in Cambodia are part of the informal economy as Cambodia’s General Department Of Taxation continues to advocate for more formalization under its strong drive to increase revenue collection.
However, for many business owners, it is not a lack of understanding, but burdensome requirements of monthly tax filings, expensive annual licensing fees, and uncompetitive tax requirements that remain the real reasons for not registering their companies.
CAMESCO 22 has been organized with the objective of recapping the year-round progress of the 10 Give a Day events, 3 EBN, and other ecosystem-strengthening meetings. The key results of the Entrepreneurial Ecosystem Building Program emphasized the gaps and market opportunities in Cambodia’s entrepreneurial ecosystem.
Finding the missing middle of the Entrepreneurial Ecosystem
Mr. Frank Jattke, Team Leader ASEAN of GIZ said CAMESCO22 was an opportunity to present innovative and best practices in supporting regional entrepreneurship, including women entrepreneurs and MSMEs.
“Finding the missing middle of the Entrepreneurial Ecosystem is a milestone to strengthening the capacity building, addressing the challenges, and stimulating innovation that are key drivers to foster the inclusive growth for national and regional entrepreneurship.
“This is linked to the GIZ implemented projects, i.e. Improved Competitiveness of National Enterprise (ICONE), Strengthening Regional Structures for SMEs Promotion in ASEAN (ASEAN-SME), and Development for innovation and start-up support for women entrepreneurs in ASEAN,” he added.
Learnings from the year found that the NGO sector had failed 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 the 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.
A fantastic year to see all the actors come together
Mr. Rajiv Pradhan, Country Director, Swisscontact and Project Director, EEB said: “CAMESCO22 brings together all the efforts put together by the entrepreneurial ecosystem actors in Cambodia in 2022. It has been a fantastic year to see all the actors come together to discuss the pain points and together find solutions to support each other and boost investments for start-up and growth enterprises in Cambodia.
“We are honored to be provided this opportunity by Khmer Enterprises in partnership with WeAct. We look forward to 2023 when concrete actions are taken up and more investors are willing to come and invest in Cambodia,” he added.
The ‘Give a Day’ initiative was launched this year after a successful pilot program was implemented with EuroCham in 2021. 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.