Assessing MSME Market Dynamics and Resilience in Phnom Penh: Challenges and Opportunities
Dina Chhorn, I Younan An, Kosal Nith, Sivly Houy, Muny Nhim Kean & Sosengphyrun Mao
Cambodia Development Resource Institute · Nov 2025
Abstract
This report examines the market dynamics and resilience of micro, small, and medium enterprises (MSMEs) in Khan Meanchey, Phnom Penh, based on data from 14,820 establishments. MSMEs are deeply embedded in the urban economy, with nearly every household engaged in business activity. Despite a strong post-pandemic recovery in 2023, early signs of slowdown emerged in 2024 due to inflation, digital disruption, and rent insecurity. The high business turnover—1,790 openings versus 825 closures—reflects a survivalist approach to entrepreneurship rather than scalable growth. Most MSMEs remain informal and micro-scale, which limits their access to credit and formal support. Sectoral analysis reveals a concentration in low-productivity sectors, such as retail and food services, characterised by gender disparities and limited digital adoption. Formalisation and digital tools are linked to improved outcomes, especially in retail and hospitality. Manufacturing remains marginal and informal. Spatial analysis reveals localised resilience but highlights vulnerability to fluctuations in consumer demand, financial constraints, and tenancy issues. The report recommends targeted policy interventions, including formalisation incentives, digital transformation support, and inclusive training for women-led businesses. Strengthening MSME data systems and enabling secure access to tenancy and credit are essential for long-term resilience and inclusive urban development.
Keywords: MSMEs; Urban Economy; Phnom Penh; Resilience; Entrepreneurship