A woman receives the Sinopharm vaccine against Covid-19 at a hospital in Phnom Penh on March 22. (Photo: AFP)
The Cambodian government has announced its first business enhancement scheme with an initial tranche of US$200 million, following on from unprecedented cash payments made to the poor as part of an economic stimulus package to combat the impact of the Covid-19 pandemic.
Under the Business Recovery Guarantee Scheme (BRGS), the Ministry of Economy and Finance said the first tranche would enable business owners to borrow from a list of approved banks including ACLEDA Bank, Asia Pacific Development Bank, Cambodia Post Bank, Canadia Bank, Phillip Bank and Prince Bank.
“The BRGS aims to support businesses including micro, small and medium enterprises and large firms to enhance their access to formal loans from participating financial institutions for working capital, investment and business expansion,” the ministry said in a statement.
“This initiative is in line with the policies of the Royal Government of Cambodia to support the survival and economic recovery during the Covid-19 pandemic.”
Cambodia had emerged relatively unscathed during the first year of the pandemic but since Feb. 20, when two Chinese women broke quarantine, authorities have struggled with a sharp rise in confirmed Covid-19 cases resulting in at least 11 deaths. Of the 2,273 confirmed cases, 1,789 were registered in the last five weeks.
The Chinese community has also been hit hard by Cambodia’s third community outbreak of the disease, which health authorities have said consists mainly of the UK strain.
The business enhancement scheme was announced as the International Monetary Fund (IMF) noted the Cambodian government’s cash payments among measures to cope with Covid-19, particularly among the poor.
The IMF report focused on adjusting to the Covid-19 shock, using unconventional policies when policy space is limited, dealing with debt, helping the vulnerable and greening the recovery.
Its Asia and Pacific Department described the pandemic’s effects on the region as stark, with business shutdowns and collapsing consumer demand causing widespread job losses.
“Some jobs may never return as the world adjusts to a new post-Covid reality,” it said.
Amid that economic prognosis, Cambodia established a $200 million reserve fund — its first ever — to directly help the impoverished, with a fourth round of payments expected to be completed by the end of this month.
“Cambodia, starting with very little in the way of social protection generally, has used a system designed to identify those living in poverty to deliver cash transfers," stated the report titled “Policy Advice to Asia in the Covid-19 era”.
It added that nearly all countries in the region had introduced new measures in response to Covid-19.
“For example, cash transfers have been given in more than half of the countries in the region,” it said, noting in some cases payments were unconditional but most targeted low-income households.
“Unemployment benefits have been expanded in Indonesia, and subsidized training introduced in Cambodia,” the report cited as examples in dealing with the pandemic.