About Us

Small and medium enterprises (SMEs) play a crucial role in socio-economic development, ensuring inclusiveness and economic growth. In Cambodia, SMEs are perceived as the backbone of the national economy, fulfilling fundamental needs for goods and services, contributing to improved livelihoods, augmenting the gross domestic product, and bolstering exports. Challenges in managing and developing this sector are particularly prevalent in the informal economy, such as family-run businesses. These challenges include limited access to finance and constrained competitiveness due to inadequate expansion into regional and international markets.

To address this, the Cambodian government has established SME Bank of Cambodia to improve access to finance for SMEs in priority sectors. SME Bank of Cambodia was officially licensed as a commercial bank by the National Bank of Cambodia (NBC) on the 27th of February 2020 and under the technical and financial guidance of the Ministry of Economy and Finance (MEF). The bank’s strategic plan and direction aim to provide effective and transparent financing schemes to support the development of SMEs to promote economic diversification and exports in line with the policies set by the Royal Government of Cambodia.

SME Bank of Cambodia has been operating for almost 4 years and is known as a state-owned policy bank. The bank has introduced and implemented affordable financing schemes to support SMEs in the following priority sectors:

Food manufacturing and processing encompass the conversion of agricultural commodities or plant-based materials into consumable food for humans. This is achieved through primary or whole processing, employing both machinery and manual labor.
Manufacturing enterprises that produce consumables, parts, or components to supply other manufacturers, process waste, and produce goods for the tourism industry.
Research and development in the field of information technology, including the provision of innovative system management services. This refers to the creation and supply of IT services linked to business and e-commerce.
Enterprises located in the SMEs Cluster Zone.
Enterprises that produce medical products and medicines, referring to businesses that manufacture equipment, facilities, and pharmaceuticals for the healthcare sector.
Enterprises that provide services to support other businesses in priority sectors, as defined by the government. This refers to businesses that distribute and provide services to other priority sectors, including those with potential growth and those impacted by COVID-19.

SME Bank of Cambodia has made a remarkable contribution to the Royal Government by addressing the lack of access to finance for SMEs. To achieve this goal, the Bank has continuously implemented co-financing schemes with Participating Financial Institutions (PFIs) and direct lending schemes which target specific segments of enterprises. It primarily focuses on the development of products and services. The Bank is also committed to expanding its distribution networks and developing its human resources.

To be the Best and Preferred SME Bank in Cambodia, providing affordable financing, easy accessibility, technical support and excellent customer experience.

To provide efficient and sustainable financing and commercial banking services to support SMEs to promote economic diversification and exports in line with government policy.

VALUES

We believe that we have a part to play in providing affordable and value-added banking services towards the development of Small and Medium Enterprises whilst exceeding the expectations of our employees, customers and other stakeholders. We aspire to achieve this by living up to our core values, “IPACE”.

CORPORATE STRUCTURE

Chairman's Statement

On behalf of the Board of Directors of Small and Medium Enterprise Bank of Cambodia (SME Bank of Cambodia), I am honored to present the Annual Report, which is the summarizes of the Bank’s performance in 2023. These results are a testament to the commitment and efforts of SME Bank of Cambodia, serving as the Policy Bank of the Royal Government of Cambodia. Our mission is to support the development of SMEs which play an increasingly crucial role in contributing to stronger and more resilient economic growth, especially in the time of crises.

Indeed, the global economic situation has continued to pose high risks and uncertainties due to the effects of various crises and major events. These include the lingering impact of the Covid-19 crisis, the war between Russia and Ukraine, and the conflict that erupted between Israel and the Hamas in late 2023. Additionally, the continued tightening of the global monetary policy has further negatively impacted global economic trends and potential sectors, including finance and banking. As a result, global economic growth in 2023 slowed to approximately 3.2%. Meanwhile, Cambodia’s economic growth remained consistent with that of 2022, at around 5%.

In this context, the financial sector in Cambodia, as well as in other countries in the region, has experienced a negative impact, reflected by a slowdown in credit growth from 19% in 2022 to 4.8% in 2023 and a rise in the non-performing loan ratio to 5.4% in 2023 compared to 3.1% in 2022. Despite the unfavorable conditions, SME Bank of Cambodia has persevered in its mission to support SME lending. In fact, by 2023, the Bank has disbursed loans through direct lending schemes to 365 enterprises in priority sectors, equivalent to a total of USD 86.15 million, an increase of about 60% compared to 2022. Additionally, co-financing schemes with participating financial institutes (PFIs) provided support to a total of 3,095 enterprises, with a total amount of approximately USD 394 million.

Through our operations in recent years, we have observed that the challenges faced by SMEs are multifaceted, extending beyond mere financing requirements. Addressing these challenges requires coordinated support from various stakeholders, including public institutions, development partners, and notably, the private sector. It is crucial for these entities to unite in addressing these challenges, demonstrating a high degree of responsibility and ownership. In this context, SME Bank of Cambodia remains steadfast in its commitment to supporting SMEs. The Bank aims to enhance its financing schemes more effectively by relaxing its credit criteria, accelerating the disbursement process for customers, and offering lending schemes specifically tailored to target segments. These initiatives align with the priority policies of the Royal Government, as outlined in the Pentagonal Strategy – Phase 1.

Finally, I would like to express my sincere appreciation to all the customers who have placed their trust in us and consistently regarded SME Bank of Cambodia as a loyal partner in supporting the start-up and expansion of their businesses. In return for this trust, we, on behalf of the Board of Directors, management, and staff of SME Bank of Cambodia, are committed to remaining reliable partners. We pledge to continue offering SME lending to support business growth, thereby contributing to the socio[1]economic development of Cambodia.

CEO'S Statement

In 2023, the global economy experienced slower growth due to the prolonged Russian-Ukrainian war, the tightening of monetary policy in major developed countries, and escalating geopolitical tensions in the Middle East. Consequently, the global economy growth rate was expected to be lower than that of 2022.

The slowdown in both global and regional economic growth has exerted pressure on the Cambodian economy, particularly affecting garment exports and causing a slump in the construction and real estate sectors. However, the recovery of tourism, the rise of non-garment exports, and the growth of domestic demand have all contributed to the Cambodian economy growing at a rate of 5.5%, slightly higher than the 5.3% in 2022.

This growth achievement is largely attributable to the indispensable support of political stability, which serves as the foundation for trust and sustainable development.

At the same time, the banking system in Cambodia continues to be resilient and progressive, ensuring sustainable financing schemes and other necessary financial services to support economic and social activities. However, lending in 2023 has decreased to 4.8%, the lowest rate in more than two decades, following the National Bank of Cambodia’s decision to cease its Covid-19 recovery lending schemes. As a result, the non-performing loan ratio continues to rise, necessitating banks and financial institutions to increase monitoring, evaluation, and restrictions on additional lending, as well as conducting regular stress tests to identify potential risks.

SME Bank of Cambodia is a policy bank that was established based on a clear vision, mission, and values to implement the Royal Government’s financing policy. Its primary purpose is to support SMEs in promoting economic diversification and export in alignment with the Royal Government’s policy. In 2023, SME Bank of Cambodia achieved the following major accomplishments:

Total assets reached USD 322 million, showing a growth of approximately 15% from USD 281 million in 2022.
The total loan balance amounted to USD 220 million, reflecting a modest increase of 3% from 2022. This growth was influenced by gradual repayments from customers participating in both phases of the co-financing schemes, which were fully implemented in 2021 and 2022. Meanwhile, direct lending from the Bank to the targeted segment surged by 61% compared to 2022, a total of USD 32.7 million.
The establishment of an additional market segment, SME Plus, has allowed for an increase in the loan size per customer to USD 1 million. This expansion aims to better support larger enterprises aligning with Cambodia’s economic growth. Additionally, the Bank has introduced and implemented Cambodia Micro Entrepreneurs Scheme (CMES), offering unsecured loans of up to USD 50,000 per customer. This initiative targets the densely populated microenterprise sector, which face the struggles of accessing finance due to a lack of collateral to meet the Bank’s requirements.
The Tourism Financing Scheme for Siem Reap (TFSS), a direct lending initiative by SME Bank of Cambodia, has been launched with a funding budget of USD 50 million. This scheme is designed to bolster tourism in Siem Reap and is part of the comprehensive reform program initiated by the Royal Government.
SME Bank of Cambodia launched 4 new branches, including 1 flagship branch and 3 satellite branches in Tboung Khmum province, Banteay Meanchey, Kampong Speu, and Kampot province (scheduled to open at the beginning of 2024). This strategic expansion is intended to extend support for customers in these regions.
The bank also continued to strengthen its business partnerships by collaborating with six additional SME associations. This initiative was geared towards expanding the ecosystem to improving timely access to finance for the targeted segments. Furthermore, SME Bank has signed Memorandums of Understanding (MOUs) with some of the prominent banking and financial technology institutions to provide customers with a broader range of options for convenient and seamless loan repayment
The number of employees at SME Bank increased to 222 in 2023, making a significant rise of 63% or an additional 86 staff members compared to 2022.
In addition, SME Bank actively collaborates with both public and private stakeholders to promote financial literacy among SMEs. The aim is to enhance their access to financing from formal financial institutions, emphasizing the importance of applying for loans with specific business purposes in mind. This initiative aims to foster sustainable and resilient business development.

Overall, these accomplishment demonstrates the unwavering efforts and commitment of SME Bank of Cambodia to delivering value to its stakeholders. We remain committed to maintaining this high standard of responsibility.

Finally, I would like to express my sincere gratitude and appreciation to the Royal Government of Cambodia, the Ministry of Economy and Finance, the National Bank of Cambodia, and all relevant institutions for their steadfast support. I am deeply grateful for the Board of Directors, management, and staff at all levels of SME Bank of Cambodia for their invaluable advice, guidance, and hard work. Their unity and strong sense of responsibility has been pivotal in fostering the sustainable growth and development of the Bank. Additionally, I wish to extend my gratitude to all our customers and partners who have collaborated with, supported, and placed their trust in SME Bank of Cambodia. Their contributions have been vital in advancing and nurturing the SME sector in Cambodia.