Recommendations

Based on the findings of the ILO mission to Cambodia in mid-1999, as well as of the ILO/UNIDO Situation Review (1997), the following set of recommendations is proposed.

1. There is a pressing need for more information on the following matters so that more effective support policies, programmes and projects can be designed and implemented:

The operation and status of the informal sector in Cambodia, both in the urban and rural areas, and covering women and men as well as family/household units;

A comprehensive assessment of the enterprise activities that are receiving financial support from the “microfinance institutions”;

The barriers and obstacles, opportunities and potential of women entrepreneurs in Cambodia;

The state of working conditions in the MSE sector.

2. There should be a review of the policy, legal and regulatory environment facing enterprise promotion, creation, development and growth in Cambodia, to determine “gaps”, inefficiencies, scale biases, and other barriers to a conducive enabling environment for the MSE sector;

3. Cambodia should benefit from some of the relevant and appropriate international best practices in business development services, including the fields of business management and appropriate skills training; entrepreneurship development; marketing supports and linkages; technology information and development; improvements to productivity and competitiveness; support for e-commerce initiatives; further expansion of member-based associations of entrepreneurs to other sectors and provinces; other key BDS activities.

4. Information centres should be established (e.g. in the form of “one-stop-shops”) to disseminate information on MSE establishment and development; procurement of technology, processes, materials and equipment; information and communication technologies (ICTs); markets and marketing, including exporting;

5. Particularly in relation to proposals for support for small business training and entrepreneurship development, the expected improvements in the performance of assisted MSEs should be manifested in a range of ways:

Improved performance, productivity, competitiveness and profitability of the MSEs themselves;

Improvements in the loan repayment capacity of those MSEs which also benefit from loans from the microfinance institutions (MFIs), thereby contributing to greater effectiveness and efficiency of the MFIs;

An improved progression rate from “micro” to “small” and from “small” to “medium” sizes of enterprises, in terms of their employment generation and business development;

Improvements in the quality and range of products and services provided both to local communities, as well as through trading linkages, to the larger medium and large-scale enterprises, and export-oriented enterprises.

6. Given the relatively low level of literacy among MSE operators, training needs and knowledge requirements should be met through highly participatory, innovative and “material-less” techniques.

7. Targeted forms of assistance should be provided by the Royal Cambodia Government in association with donor support to develop those business sectors that have acknowledged external economies and that are likely to contribute both directly and indirectly to national development. These should include sectors such as building and construction, building products and supplies, transportation, food production and processing, and the tourism sector.

8. More flexible forms of skills training should be encouraged and made available, particularly through private sector training providers.

9. There should be active public debate of the role of the MSE sector in national economic development, and this report could be used as a key background document to stimulate discussion and enable the formulation of new supportive approaches.

10. The MFIs should not ignore the importance of the urban-based borrowers, particularly those involved in MSEs. Credit lines should be opened to enable urban-based MSEs, particularly in Phnom Penh, to have access to commercial finance for their working capital and long-term investment requirements.

11. Pilot activities should be undertaken to improve the quality of working conditions in MSEs, to be implemented through the various associations of small-scale enterprises.

12. The impressive development of groups of associations of SMEs in the North West of Cambodia should be consolidated, promoted and expanded with assistance from the donor community.