Cambodia Investment Review
Small and medium enterprises (SMEs) are the backbone of the Cambodian economy, playing a crucial role in social and economic development by benefiting the employment rate, raising living standards, and increasing market competition.
According to KhmerSME, SMEs represent 70% of total employment and 99.8% of companies and contribute 58% to gross domestic product (GDP).
In recent years, the government has been working on implementing digital adoption specifically for SMEs. It has established institutions such as Khmer Enterprise and the Techo Startup Center to provide support for sustainable business practices, as well as a wide range of networks and ecosystems, with financial assistance to accelerate SME growth.
The COVID-19 pandemic accelerated the adoption of advanced technology, leading individuals to embrace digital lifestyles, while businesses are increasingly integrating digital strategies for operational needs.
Cambodia has developed a digital economy and social policy framework from 2021 to 2035, aiming to enhance productivity and economic efficiency through the implementation of digital technology.
To successfully achieve digital adoption for SMEs in Cambodia, it is crucial for all relevant stakeholders to collaborate and work together towards this common goal. This collaboration will enable SMEs to access the necessary resources and expertise for digital transformation.
The digital adoption policy is playing a pivotal role in aiding Small and Medium Enterprises (SMEs) in Cambodia to recognize the imperative need to shift towards digitalization.
Importance Of Providing Support for The Kingdoms SMEs
“The journey towards digitalization is not a one-time effort but a continuous process that responds to the dynamic needs of business, technology advancement, and socio-economic development,” H.E. Dr. Taing Nguonly, Executive Director of Techo Startup Center, stressed to Cambodia Investment Review highlighting the importance of support for SMEs and insisting that the policy needs to be “simple and easy to understand.”
SMEs must understand that the digital economy is a field that constantly evolves. Dr. Taing Nguonly notified, “Enterprises must realize that not going digital may cause their business model to lose value or even lead to their disappearance.” He urged businesses to adapt to the digital economy, capitalizing on policies and support mechanisms, which is essential for sustainable growth.
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Digital adoption in SMEs is not just a trend; it’s a necessary step towards strengthening operational efficiency and increasing productivity. “Adopting digital tools and solutions helps in expanding markets and increasing competitiveness,” noted Dr. Taing Nguonly. “This shift will foster the inclusion of Cambodian enterprises in global digital value chains.”
Beyond individual businesses, digital adoption across SMEs can have a transformative impact on Cambodia’s economy. “Success in digital adoption means economic efficiency and business sustainability for the nation, fostering a positive and forward-thinking business environment,” said Dr. Taing Nguonly.
Techo Startup Center (TSC) is actively fostering SME digital adoption through platforms like the Cambodia Data eXchange Platform (CamDX) and the Online Business Registration System. “We are committed to nurturing startups, enhancing collaboration, and implementing programs like the Enterprises Go Digital Program to drive the nation’s digital transformation,” declared H.E. Dr. Taing Nguonly.
With the Enterprises Go Digital Program, TSC is taking significant steps to boost digitalization within Cambodian enterprises.
Dr. Taing Nguonly concluded, “This program is our commitment to sector-specific support and a nationwide marketing and awareness-raising campaign. It’s our vision to ensure that Cambodian enterprises are ready to thrive in the global digital economy.”
Taking A Leading Position in The Adoption Of Fintech
The Kingdom’s banks have also been taking a leading position in the adoption of fintech in line with the government’s objective of promoting a digital economy and society.
The National Bank of Cambodia has formulated the FinTech Development Roadmap 2020-2025 with the aim of delivering “digital financial services and products with greater accessibility, efficiency, and affordability.”
“FinTech has played a significant role in promoting financial inclusion and digital transactions in Cambodia,” the NBC stated as to the importance of the FDR. “In recognition of its potential, the NBC has focused its efforts on developing the FinTech ecosystem, particularly the enabling of FinTech payments for MSMEs and consumers, they commented further.
Also adding: As of mid-2020, there are more than 50 banking and financial institutions in Cambodia which provide mobile banking apps for their customers to access online banking and financial services such as deposits, loans, utilities payments and others.”
CEO of Wing Bank, Han Peng Kwang, who is a strong supporter of digital adoption for SMEs, said that “every aspect of social and economic work now involves digital, which makes our lives more convenient in this in this modern world.”
Cambodia has made significant progress in establishing a digital economy and social policy framework, allowing stakeholders like Wing Bank to help SMEs grow in the digital context, said Han Peng Kwang.
Wing Bank itself has undergone a rapid path to digital implementation in our business, even before the COVID-19 pandemic. As we understand the needs of businesses in their daily operations, especially on a financial level, we have introduced many innovative financial products and services that best suit the needs of every SME owner.
Important For Banks to Work And Partner With Different Establishments
The industry veteran, with nearly three decades of experience in the banking sector, said it was important for banks to work and partner with different establishments to ensure that the SME businesses could thrive.
In 2023 alone, Wing Bank has supported and partnered with various organizations and entities with the intention of helping their members’ businesses grow sustainably, Han Peng Kwang said.
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These include the Cambodia Chamber of Commerce, Federation of Associations for Small and Medium Enterprises of Cambodia (FASMEC), Techo Startup Center, Khmer Enterprise, Pact Cambodia, International Business Chamber, Young Entrepreneurs Association Cambodia, and many more.
Through Wing Bank’s support, we are confident that SMEs will find it easier to access finance and other resources through the programs we have supported so far and as a result, entering into the digital economy will not be too difficult for them, he said.
By working with relevant stakeholders in such ways, the government is establishing supportive policies and regulations, and providing funding and financial support, while offering tailored-made training and capacity-building programs.
Such a comprehensive approach will not only help SMEs adapt to digital technologies but also empower them to thrive in the digital economy. With the government’s objective of promoting a digital economy and society, its work on implementing digital adoption specifically for SMEs is coming ever closer to fruition.
