IFC, MISTI Explore GFT Sector Transformation and Stronger MSME Linkages in Cambodia

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IFC, MISTI Explore GFT Sector Transformation and Stronger MSME Linkages in Cambodia
IFC, MISTI Explore GFT Sector Transformation and Stronger MSME Linkages in Cambodia./Image credit: MISTI.

AKP Phnom Penh, January 20, 2026

The Minister of Industry, Science, Technology & Innovation, H.E. Hem Vanndy, met with a delegation from the International Finance Corporation (IFC), led by Towfiqua Hoque, IFC Resident Representative to Cambodia, to discuss the transformation of Cambodia’s Garment, Footwear and Travel Goods (GFT) sector, with a strong focus on productivity, backward linkages, and the integration of local MSMEs into global supply chains.

During the meeting held in Phnom Penh on January 19, 2026, Minister Vanndy commended IFC’s long-standing support to Cambodia’s economic growth, and noted that while past cooperation has focused heavily on the financial sector, the next phase must prioritise industrial depth and value addition.

He stressed that Cambodia’s industrial growth faces new vulnerabilities, especially in the context of post-LDC graduation, making diversification, productivity improvement, and stronger local supply chains a strategic priority.

The Minister highlighted the importance of developing backward linkages in the GFT sector, noting that Cambodia currently hosts more than 3,000 factories with record-high investment exceeding USD 10 billion in 2025, yet local content remains limited.

He called on IFC to help “connect the puzzle pieces” by nurturing capable SMEs in sub-sectors such as yarn, accessories, chemicals, leather, and packaging, emphasising that SMEs are key to high value addition and long-term competitiveness.

Hoque said IFC’s visit, which includes manufacturing experts from Bangladesh, aims to support the structural transformation of Cambodia’s GFT sector by drawing on regional experience.

She noted IFC’s extensive work with global brands, supply-chain finance, Better Factories Cambodia, and sustainability programmes, as well as its annual deployment of USD 150–200 million in short-term supply-chain finance.

The IFC is looking at potential investment in green special economic zones, logistics hubs, and financing mechanisms for both SMEs and large foreign direct investment (FDI) projects.

The Minister also asked the IFC to help identify game changers and emerging product lines with concrete projects that Cambodia can competitively develop in addition to the traditional GFT sector.