Overview Of SME Sector In Cambodia

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Recommended: micro and small enterprises

In chapter three gives about the overview on SME sector in Cambodia. Majority of establishments in Cambodia are micro-enterprises and number of SMEs and large enterprises are very few. The structure of Cambodia industrial is inform of missing middle level, it means that Cambodia has much more micro-enterprises and fewer SMEs to support to large enterprises. However, the performance of micro-enterprises and SMEs give the positive significant on gross value added and job creation to economy. Moreover, in chapter four provide the reader about main barriers which SMEs and micro-enterprises are facing recently such as the legal and policy framework, limited access finance and competitive barriers.
In this chapter will provide some solutions as measurement to improve these SMEs and micro-enterprise barriers and find out opportunity for the SMEs and micro-enterprises development in future.
5.1 Policy and Legal Framework Reform
It is really important that the RGC should improve their legal and policy framework on SMEs and micro-enterprises. The effective legal and regulatory framework push investors to start businesses with the sound business environment. There are several areas in the legal framework reform which government should consideration on as the following:
Efficiency of Government Institutions: To improve the sound and safe legal and policy framework for SMEs and micro-enterprise development, the efficiency of government institutions is needed. Cambodia has established the Sub-Committee of SMEs in 2004; however, the government department or agency is not established, so RGC should create a department or agency to responsible on the SME development. This department and agency should have in the local level which it is easy fo...

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...nd large enterprises and FDI. The improvement on law and regulation environment (the reliable regulation, stable political environment, economic stability) can attract more FDI and foreign investment to invest in potential sectors. Government can help SMEs in sub-contracting with the large enterprises. First, SMEs can make sub-contracting by producing some spare-part and components to supports large enterprises. Then improvement of production, SMEs are able to be suppliers in all these product directly to large enterprise. Besides subcontracting, networking in form coordination and exchange of information among SMEs are very important to activate agglomeration effects of industrial clusters. Significant positive point from the development of business linkage are able making SMEs gain experiences from the large enterprises by gaining new technology and innovation.

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