These loans provide the necessary financial resources for SMEs to thrive and adapt in an ever-changing market. By effectively utilising these funds, SMEs can enhance their resilience and achieve sustainable, long-term success. 

In today's competitive business landscape, small and medium enterprises (SMEs) play a crucial role in economic growth and job creation. However, securing the necessary funding to support their operations, expand or innovate can be a significant challenge.

Bank loans offer a vital lifeline for SMEs, providing access to much-needed capital. This financial support enables them to invest in equipment, improve cash flow and seize new opportunities. Kiripost explores how bank loans can be a game-changer for SMEs, highlighting the benefits that empower them to thrive in their respective markets.

Hailing from Kampong Chhnang Province, Khiev Linda, 36, also known as Din, is the owner of La Mémoire​, a flower decoration enterprise that blends Khmer artistry with modern design located in Toul Tompong, Phnom Penh.

Din currently has three businesses, with La Mémoire being the most sustainable, as it specialises in fresh flower decoration services. It has been in operation now for 10 years.

Accessing financial loans

Din said that obtaining a financial loan from a bank can be challenging and time-consuming, especially as he resides in Phnom Penh while his land is in his hometown in Kampong Chhnang province. This situation requires the bank team to visit and verify many steps.

He noted that the documentation process is particularly difficult, as he needs to deposit land titles as collateral for the loan. Din added that even if the loan is intended for business purposes, the bank requires these titles, with his parents serving as witnesses. However, ultimately, he is responsible for the repayment.

“My business doesn't generate sales throughout the entire year; there's a low season from April to August. September marks the beginning of the high season for us. During this peak period, I need to prepare a budget to expand our service offerings,” Din told Kiripost.

“As my business has been growing year by year, it's crucial for me to seek a bank loan. I can estimate our sales potential during the high season, which is why obtaining a loan is part of our strategic planning.”

Din said due to the business being operational for a long time, he has been able to identify new and pursue new opportunities, adding that the possibility of securing a bank loan has motivated the company to expand into other areas.

“After eight years of operating La Mémoire, I saw a promising opportunity in the food industry. Therefore, I needed to seek a loan from the bank to launch ED’s HOUSE, driven by this potential for growth,” he added.

Din said the process of getting the bank loan approved is “relatively straightforward” with him needing to present the income and expenses. “This allows the bank to assess our financial situation and predict our capability to manage the loan responsibly,” Din said.

“As long as we provide accurate data on income and expenses for their assessment process, we can enhance our chances of loan approval.”

Is it beneficial for start-ups to seek bank financing?

Based on his experience, Din would not recommend that businesses that have been operating for less than a year seek a bank loan due to their limited experience in the market.

“At this stage, it's often difficult to assess their potential for success. Moreover, they may lack familiarity with the banking process. It's crucial for start-ups to establish their credibility, as doubts about their ability to make regular repayments can arise,” he said.

“However, if a start-up identifies growth opportunities exceeding 50 percent, I would encourage them to consider a loan. Sometimes, they are well-prepared and recognise their potential, but they lack the budget to execute their plans.”

Din added that it is essential that businesses have a clear understanding of their budget needs and repayment capability. “If they can successfully manage their finances according to their plans, it can be a positive step forward.”

He said when he decided to open a steak restaurant, he needed to take out a bank loan. As he also runs a flower shop, which serves as his stable main business, he has a backup plan in case the steak restaurant does not succeed.

Din stated that businesses that have been operating for less than a year often encounter numerous challenges, including financial difficulties and other obstacles. During this critical period, if they face financial pressures, it can disrupt their plans and hinder their opportunities for growth.

USD 500 Million to Boost Cambodia’s Economy

According to the 2022 Economic Census, Cambodia’s 753,000 MSMEs employ nearly 3 million people, 60% of them women, and contribute 63% of GDP.

Strengthening this sector is critical to building a more diversified and competitive economy, yet access to financing remains one of its biggest hurdles.

To address this, financial institutions are introducing initiatives to make credit more accessible. Wing Bank recently pledged a USD 500 million loan commitment to support SMEs and startups.

“We’re not just financing businesses—we’re building a stronger, more inclusive, and innovative economy for Cambodia,” said Dr. Dmytro Kolechko, CEO of Wing Bank. “When businesses grow, the nation thrives.”

As part of this initiative, USD 100 million has been allocated through the Women’s Economic and Entrepreneurship Development Centre under the Ministry of Women’s Affairs to help Cambodian women start and grow businesses. An additional USD 200 million, in collaboration with the Ministry of Industry, Science, Technology & Innovation (MISTI), will support MSMEs and startups in boosting competitiveness, fostering innovation, and driving sustainable growth.

Wing Bank has also introduced a USD 200 million credit line with zero interest for up to five days for companies paying duties and taxes through its e-payment platform, in partnership with the General Department of Customs and Excise. This measure aims to ease cash flow challenges and encourage digital adoption among businesses.

Beyond financing, Wing Bank plans to work with stakeholders to deliver training programs and workshops, ensuring businesses have the knowledge and tools to maximize these resources.

Entrepreneurs and SMEs seeking access to these loan facilities can visit any Wing Bank branch or connect through its official customer service channels, including the Wing Bank Facebook page.

This article was originally reported by Kiripost. Read the full story here.