Phnom Penh, Cambodia, 4 November 2003 — Strengthening the business skills of poverty-fighting non-profit organizations is an important part of the private sector development process in Cambodia, said Harold Rosen, Director of the World Bank Group’s Small and Medium Enterprise Department.
Mr. Rosen made this observation yesterday while in Phnom Penh to sign new agreements between the International Finance Corporation’s Mekong Private Sector Development Facility (MPDF) and four non-governmental organizations (NGOs) that want to develop sustainable businesses. MPDF, which promotes small and medium enterprise (SME) development in Cambodia, Lao PDR and Vietnam, helped the four NGOs obtain business development grants from IFC’s SME Capacity Building Facility (CBF).
“Many NGOs already have income generation projects that help the poor and also many of the skills needed to run a successful business, such as how to plan, raise money, handle finances and manage people,” Mr. Rosen said. “IFC is in a good position to provide them with expert advice in additional areas they can’t cover on their own, such as improving quality, marketing more effectively, and introducing greater commercial discipline. With these inputs, NGO income generation projects could evolve into successful small businesses that create larger numbers of lasting jobs and generate profits to fund their parent organizations’ social programs. Both are becoming increasingly important in Cambodia as the working age population increases and donor funding declines.”
In his speech, H.E Ith Sam Heng, the Minister of Social Affairs, Labour, Vocational Training and Youth Rehabilitation (MOSALVY), also stressed the urgent need for job creation. “The population has grown rapidly since the 1980s and now some 200,000 young people are reaching working age every year – most of them in rural areas where there is not enough land to support them. The government considers SME development to be Cambodia’s best hope for both job creation and poverty alleviation.”
Since 1999, CBF funding and MPDF expertise has enabled a number of Cambodian NGOs to build capacity in finance, marketing and other key business functions. MPDF has also helped secure advice from product improvement specialists and investment from IFC and other sources. To ensure strong commitment from recipients, MPDF’s assistance is always provided on a cost-sharing basis.
“The goal of this assistance,” said Adam Sack, MPDF’s Manager for Cambodia and Lao PDR, “is to create lasting jobs, develop production and managerial skills and build sustainable income for the social programs that NGOs provide.”
The four NGOs signing the agreement yesterday were the National Centre for Disabled Persons (NDCP), Cambodian Health Education Development (CHED), NYEMO and Hagar.
NCDP, which helps newly-disabled persons develop daily living skills and get the education and training they need to earn a living, will use its CBF grant to increase local and overseas sales of the handicrafts it markets at both the retail and wholesale levels for some 40 disabled persons from around the country. Battambang-based CHED, which educates factory workers and youth about general as well as reproductive health, will use IFC’s grant to turn its graphic design and printing unit into a profitable business, catering both to NGO and private sector clients.
