Cambodia, IFC eye garment sector overhaul with stronger MSME role

PHNOM PENH, Jan 20, 2026 (KPT) – Cambodia and the International Finance Corporation (IFC) have opened talks on restructuring the country’s garment, footwear and travel goods industry, with a focus on boosting productivity, strengthening local supply chains and integrating micro, small and medium enterprises (MSMEs) into global networks.

Industry Minister Hem Vanndy met Monday with IFC’s resident representative Towfiqua Hoque, praising the lender’s role in Cambodia’s economic growth but urging future cooperation to go beyond finance.

He warned that the manufacturing base faces new vulnerabilities as Cambodia prepares to graduate from Least Developed Country status, making diversification critical.

Cambodia hosts more than 3,000 factories in the sector and attracted over $10 billion in investment in 2025, but Vanndy said local content remains limited. He called for stronger “backward linkages” through domestic suppliers of yarn, accessories, chemicals, leather and packaging.

Hoque said IFC’s mission, supported by experts from Bangladesh, aims to share regional experience and promote structural transformation.

She cited IFC’s work with global brands, supply-chain finance and sustainability programs, and noted annual short-term financing of $150–200 million.

IFC is also exploring investments in green special economic zones, logistics hubs and financing mechanisms for SMEs and foreign investors.