Loans worth $54.2 million were approved by state-owned Small and Medium Enterprise Bank of Cambodia Plc (SME Bank) for 350 businesses under the Tourism Recovery Co-Financing Scheme (TRCS) as of August 31, 2023.

This accounted for 36.1 per cent of the $150 million co-financing project fund allocated by the government to aid and promote the growth of the tourism sector, which was heavily impacted by Covid-19.

According to SME Bank, 29 per cent of the loan recipients comprised hotel operators, 25 per cent (guesthouse), 31 per cent (restaurants) and 15 per cent (tourism-related businesses).

Of the total, 41 per cent consist of women entrepreneurs.

The $150 million scheme, approved by the Ministry of Economy and Finance on May 17, 2022, is a joint funding contribution where $75 million was allocated by the government and the remaining $75 million was raised by over 20 participating financial institutions.

The participating financial institutions include ACLEDA Bank, Canadia Bank, Sathapana Bank, Foreign Trade Bank of Cambodia, ABA Bank, LOLC, Wing Bank, Amret and CIMB Bank.

The scheme allows tourism business operators to apply for loans from participating financial institutions, which are partners of SME Bank with a maximum interest rate of 6.5 per cent per annum and a loan tenure of up to seven years.

Borrowers are granted a 12-month grace period and can take out loans of up to $400,000 in Khmer riel or US dollars.

Cambodia Tourism Federation president Din Somethearith told The Post on September 5 that the TRCS largely helped the sector cope following a sharp decline between 2020 and 2022.

However, the tourism sector is not as strong or active as it was before 2020, so loan applications have been fairly limited, he said, noting that this might be the reason why the total loan amount is small.

He also opined that the lack of acceleration in borrowing was because enterprises in need of loans might already have received loans, while some enterprises might not have assets to put as loan collaterals and others might not want loans.

Asked to comment on international tourism, Somethearith said the weak global economy meant that Cambodia is mostly receiving visitors from neighbouring countries who travel by land, and who do not spend as much as travellers from distant developed countries.

Meanwhile, Cambodia Association of Travel Agents president Chhay Sivlin said the conditions set by the SME Bank pose a barrier for those in the tourism sector who want loans on special terms.

The conditions include applicants’ compulsory possession of “good financial statements” and collaterals.

“If SME Bank can ease these conditions, it would definitely contribute to the speedy recovery of the sector,” Sivlin recommended.

In the first seven months of 2023, Cambodia received 3.03 million foreign visitors, an increase of 308.5 per cent compared to 743,459 persons in the same period in 2022, the Ministry of Tourism said.

Among them, Thais and Vietnamese accounted for 51.9 per cent of the total.

The number of Thai visitors rose 331.2 per cent year-on-year, making them the highest with 1.03 million people or 33.8 per cent of the total international arrivals.

As for Vietnamese arrivals, the ministry recorded 551,156 visitors or 18.1 per cent of the total, up 190.4 per cent from last year.

“But not all of them are tourists. They consist of business people too,” Sivlin said.