Minister of Industry, Science, Technology, and Innovation Hem Vanndy said the government is committed to promoting micro, small and medium enterprises (MSMEs) access to finance and motivating informal SMEs to register into the formal economy.
Addressing a press conference on Sunday at the 2nd National Day of Science, Technology, and Innovation, Vanndy said the ministry is developing a number of policies to help small and medium enterprises and transform informal businesses into formal ones.
Of Cambodia’s more than 770,000 business establishments and enterprises, only 2 percent are officially registered enterprises, according to the Ministry of Planning’s National Institute of Statistics.
According to the MISTI, only 2 percent of those are registered formally.
According to Vanndy, of 770,000 business establishments and enterprises, more than 97 percent are micro-enterprises and most of them are in the informal economy.
Many factors prevent these enterprises from being listed formally such as experience, marketing, entrepreneurship, ability to meet compliance, as well as some tax conditions and the management of their own businesses, he said.
“The government has given priority to the transformation of the economy from informal into the formal system. If informal business integration into the formal economy is successful, it will help the economy grow,” the minister added.
The minister motivated those informal MSMEs to be ready to participate in the implementation of the principles that the government sets out, citing that the ministry will start promoting additional campaigns to help MSMEs understand and organize information for registration.
Prime Minister Hun Manet has recently emphasized the crucial role of SMEs in strengthening the Cambodian economy, considering the SME sector as the backbone of the economy.
“We must focus on transforming the characteristics of the informal sector into the formal. The policy direction we have established provides a substantial foundation for this endeavour,” the Prime Minister said in an event held in February.
The premier also encouraged the ministry and associations to jointly work in the sector to motivate informal ventures to integrate into the formal economy and to increase arrangements for SME clusters.
According to the MISTI report, food and beverage processing SMEs accounted for 64.9 percent or 28,966 of the total registered 44,628 SMEs last year, followed by steel processing and weaving and garment with 5,493 (12 percent) and 3,527 (7.9 percent) respectively.
Source: https://www.khmertimeskh.com/501462328/informal-msmes-motivate-to-integrate-into-formal-economy/