A Study On Motivating Small And Medium Sized Enterprise (SME) Development In Cambodia

Private sector is one important sector to push Cambodian economic growth anddevelopment. The majority private sector (buiness firms) are formed in mico-enterpiseestablishments and SMEs. In this paper find out that SMEs is one important factor whichcontributes to Cambodia’s economy by promote the economy growth, employmentopportunities and enlarges the national income (tax collection from establishments).However, this paper also shows that SMEs still face with some challenges such as weakregulation and legal framework (require more procedures, time, and high cost, unclear andmarket-oriented Framework for SME Development), limitied access of finance (high risk,lack of credit information sharing system, weak financial and legal framework structure,lack of financial statements, lack of collateral, and lack of bank account) and competitivebarrier (human capital, low productivity of labour, lack of technology and innovation, lackof infrastructure, limited to access market share, business linkage, and lack of information).Moreover, this paper also gives some policies recommendation to overcome theseobstacles in order to promote SME development and Cambodian business environmentwhich are the backbone for Cambodian economy. To promote SMEs in Cambodia, RoyalGovernment of Cambodia should improve on their legal framework (strengthengovernmental institutions, improve the registration process and update commercialframework), improve access finance of SMEs (improve collateral and land title expanding,credit guarantee scheme, leasing, credit information sharing, improve accounting literacy,improve capital market and governmental financial support) and governmental supportSMEs activities (human development program, Business Development Services,Associate building, Public Private Partnership, market access improvement, technologyand innovation improvement and business linkage improvement).