PHNOM PENH, May 28 (Xinhua) -- The Asian Development Bank (ADB) on Wednesday signed a 75 million U.S. dollars loan with Cambodia's largest bank, Acleda Bank, to address the rising financing requirements of micro, small and medium-sized enterprises (MSME) in the country.
The agreement was inked between Christine Engstrom, director in ADB's Private Sector Operations Department, and Acleda Bank's president and CEO In Channy.
"The assistance will enhance MSME access to longer-term finance, which in turn is critical to support poverty alleviation through income and employment generation in rural areas where about 90 percent of Cambodia's poor live," said Christine Engstrom.
According to an ADB press statement, Cambodia's level of financial services is one of the lowest in Asia and the Pacific.
"While MSMEs account for 99 percent of private companies and 73 percent of all jobs in the country, they have very limited access to bank financing," the statement said.
In Cambodia, 84 percent of MSMEs are financed through the informal financial sector, where interest rates can go as high as 10 percent per month, the ADB statement added, citing figures of the country's central bank.
Acleda Bank, which has an extensive branch network in rural areas, will use the loan to broaden its lending base and extend its services to the underserved communities.
"The assistance will also allow ADB to deepen its relationship with the bank, which also has a presence in Laos and Myanmar, and strengthen the potential for ADB to help promote financial inclusion in these other challenging markets," the statement said.
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