SME registrations sluggish in 2017-2022 amid calls for more incentives

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Workers are packing chips at LyLy Food Industry in Phnom Penh's Por Sen Chey district on June 25, 2020. Heng Chivoan

Small- and medium-sized businesses accounted for 43,813 or roughly one-twelfth of “more than 520,000” registered manufacturing enterprises as of July, up by 442 or 1.02 per cent over the same time in 2017, a senior industry official reported, as industry insiders called for more motivation for these smaller firms to register.

Ministry of Industry, Science, Technology and Innovation director for small and medium enterprises and handicraft Chhea Layhy was speaking at an August 11 press conference on the achievements of the ministry over the past five years.

 

Layhy said his ministry has developed new ways to promote registration among small- and medium-sized enterprises (SME) and smooth the process nationwide, thereby achieving other related goals.

These include the Single Portal overseen by the finance ministry; improvements in statistical management powered by a technologically advanced database system; and the delegation of power to sub-national authorities in the capital and all 24 provinces to facilitate registration, unless certain high-risk products are involved.

He stressed that these measures are gaining traction this year. “We need to provide additional training to focal officers in the capital and all provinces – through a plan scheduled to be completed in 2023 – so that all SMEs can register online, guaranteeing them some benefits,” Layhy said.

He added that the ministry rolled out the national digital information platform KhmerSME to better acquaint manufacturing SMEs and handicraft makers with emerging technologies and provide them the tools to overcome modern challenges.

Federation of Associations for Small and Medium Enterprises of Cambodia (FASMEC) president Te Taingpor pointed out that just over eight per cent of the “around 530,000” registered manufacturing enterprises are classified as SMEs.

He attributed this low proportion to a general understanding among SMEs that registration provides them little in the way of benefits, and instead just makes things more difficult.

 

“The ministry should consider offering SMEs more incentives to encourage them to register. In particular, it should get them to understand the benefits that registration can guarantee them,” Taingpor said.

Of note, the Cambodia Industrial Development Policy 2015-2025 aims to boost registration among SMEs to at least 80 per cent and ensure that no less than 50 per cent have proper accounting records and balance sheets by 2025.