March 27, 2020
Women engaged in the logistics industry (collecting agricultural products) in Cambodia
On March 27, the Japan International Cooperation Agency (JICA) signed a $50 million loan agreement with Hattha Kaksekar Limited (HKL), one of the leading deposit taking microfinance institution in Cambodia to provide funds to micro, small and medium enterprises (MSMEs) in rural areas of the country through Private Sector Investment and Finance based on the Facility for Accelerating Financial Inclusion in Asia (FAIA) (announced March 27, 2020).
90 percent of the population below the poverty line are living in rural Cambodia. It is important to support them in growing and creating more employment in order to further reduce poverty. However, the large finance gap exists (approximately 21 percent of gross domestic product according to estimates). The fact that many MSMEs have limited access to finances have restrained the growth of MSMEs. Also, it is notable that many MSMEs are run by women (women are running 62 percent of micro enterprises and 26 percent of small and medium-sized enterprises). Ensuring MSME’s growth is an important part of empowerment of women.
HKL began operations in 1994. It boasts an expansive network in rural Cambodia: 82 percent of their loan agreements are found there. Also, 61 percent of loans are extended to women customers. HKL obtained Smart Campaign certification in 2016 for promoting customer protection in microfinancing.
This loan from JICA supports HKL in expanding lending activity to MSMEs in rural areas. It is designed to reduce poverty and regional disparity in Cambodia. Thus it will contribute not only to sustainable economic growth, but also to SDGs (Sustainable Development Goals) 8, 9 and 17.