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Singapore and Cambodia Launch Digital Corridor to Boost SME Trade
Singapore has increased its investments in Cambodia, becoming the second-largest source of foreign investment in the country in 2023.
The National Bank of Cambodia and the Monetary Authority of Singapore launched the Financial Transparency Corridor to boost trade between SMEs by improving data accessibility and addressing financing challenges.
Key Takeaways
- The Financial Transparency Corridor (FTC) aims to facilitate greater trade and investment flows between Singapore and Cambodia, benefiting small and medium-sized enterprises (SMEs) in both countries.
- Cambodian SMEs face challenges in accessing financing due to collateral requirements, limited formal banking services, high interest rates, and a lack of financial records or credit history.
- Singapore has become an important trade and investment partner for Cambodia, particularly in sectors such as manufacturing, real estate, services, and technology.
Launch of the Financial Transparency Corridor
The National Bank of Cambodia (NBC) and the Monetary Authority of Singapore (MAS) launched the Financial Transparency Corridor (FTC) on June 18. This initiative aims to boost trade between small and medium-sized enterprises (SMEs) in both countries.
A key challenge for Cambodian SMEs is the difficulty in accessing necessary financing for business expansion. Various factors contribute to this issue, complicating their growth prospects. The participating financial institutions in the FTC will play a crucial role in addressing these challenges.
Enhancing Financial Literacy
The lack of understanding of financial products and services among around 43 percent of SME owners in Cambodia has a significant impact on their ability to effectively manage their finances and access loans. This limitation hinders their potential for growth and success in the business world.
In response to this challenge, the FTC initiative is focused on enhancing data accessibility, with the ultimate goal of supporting Cambodian SMEs in overcoming these barriers. By improving access to relevant financial information and resources, the initiative aims to empower SME owners to make informed decisions and navigate the complexities of financial management more effectively.
Additionally, by fostering global trade, the initiative seeks to create opportunities for Cambodian SMEs to expand their market reach and establish mutually beneficial partnerships with international businesses. Through these efforts, the initiative aims to contribute to the overall economic development and prosperity of Cambodia’s SME sector.
Participating financial institutions
The participating financial institutions are as follows:
- Singapore:
- Liquid Group;
- Sing Investments & Finance; and
- ANEXT Bank Pte Ltd.
- Cambodia:
- Advanced Bank of Asia;
- Acleda Bank;
- Phillip Bank;
- Sathapana Bank; and
- Wing Bank.
Singapore’s importance as a trade and investment partner
Singapore has increased its investments in Cambodia, becoming the second-largest source of foreign investment in the country in 2023. Additionally, bilateral trade between the two countries reached US$1.8 billion in the first four months of 2024, marking a 42% increase from the same period in 2023.
Read the original article : Singapore and Cambodia Launch Digital Corridor to Boost SME Trade
This article was first published by ASEAN Briefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected].
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