In the morning of August 9, 2023, CGCC staff joined Business Development Center & the National Blood Transfusion Center at the Business Development Center to donate blood to help save the lives of patients who are in need of blood.
Author: Sorn Chhorvyvatey
CGCC Participated in the 31st Asian Credit Supplementation Institution Confederation (ACSIC) Training Program
Mr. No Lida, Deputy CEO of CGCC, led CGCC’s delegation to attend the 31st ACSIC Training Program in Jakarta, Indonesia, hosted by the Indonesia Guarantee Corporation Association (ASIPPINDO), and presented about Cambodia’s Credit Guarantee Schemes under the theme “Building a Resilient Future: Enabling Sustainable Credit Supplementation.”
This training program was participated by approximately 60 delegates representing members/observers of ACSIC from 12 countries in Asia including Cambodia, Indonesia, India, Japan, Korea, Malaysia, Mongolia, Nepal, Papua New Guinea, Philippines, Taiwan, and Thailand.
Through this training program, each member and observer of ACSIC was given an opportunity to share their respective credit guarantee regarding their institutions’ background, law and regulation, schemes/products, procedure, and mechanisms, especially credit guarantee schemes to support Environmental, Social, and Governance (ESG). Beyond credit guarantee, CGCC and other delegates also shared the commitment and effort in improving financial literacy for MSMEs through capacity-building programs.
ACSIC is the cooperation of the largest Asia’s credit guarantee organization established in 1987, designed for improving the credit guarantee system, which currently has 19 members and observers from 13 Asian countries.
CGCC provides $130M credit guarantees to over 1,500 businesses
The Credit Guarantee Corporation of Cambodia (CGCC) has supported 1,566 businesses by providing credit guarantees for their loan applications, amounting to $132.74 million as of June 2023.
CGCC said in a statement yesterday that the total amount of outstanding guaranteed loans was $105 million, while the total amount of outstanding guaranteed amount was $75 million.
There are 1,432 micro, small and medium-sized businesses (MSME) and 134 large businesses in Cambodia, the report said, adding that about 640 were women-owned.
The report stated that a significant portion of the loan guarantees were used for working capital, investment, business expansion, and capital expenditures.
CGCC, the first credit guarantee institution in the country under the Ministry of Economy and Finance, was established in August 2020, during the Covid-19 pandemic to provide timely credit to support the rehabilitation and sustainability of local businesses.
The credit guarantee scheme has contributed in strengthening entrepreneurship and improving financial inclusion in Cambodia by facilitating the smooth distribution of loans, said Mey Vann, Secretary of State at the Ministry of Economy and Finance.
“The CGCC has played a key role in serving the needs of SMEs in Cambodia, which are struggling in the wake of the Covid-19 pandemic and the inflation crisis, and need credit from banks for their business,” Vann said.
The government will continue to implement supportive policies through credit guarantee mechanisms to ensure the development of small and medium enterprises, he added.
CGCC has so far guaranteed 40 percent of its total guarantees of $130 million to women-owned MSMEs, said Chief Executive Officer of CGCC Wong Keet Loong while signing a $3 million portfolio guarantee agreement for women entrepreneurs between CGCC and Prince Bank on July 13.
“The woman scheme comes with lower interest rates and guarantee fees for the 1st year. These favorable terms will enable women MSMEs to obtain lower cost of financing,” he said.
The finance ministry has authorised the extension of the BRGS beyond December 31, 2022, until all funds have been utilised, an early-January CGCC statement confirmed, which noted that the terms of the scheme had also been updated, including the maximum guarantee amounts for different categories of businesses.
CGCC’s main mission is to provide credit guarantees to lenders on loans made to businesses based on international standards to share the risk with lenders and to improve financial inclusion.
Credit to: Khmer Time
CGCC and Canadia Bank partner for quick loan turnaround
Canadia Bank Plc has joined the state-owned Credit Guarantee Corporation of Cambodia Plc’s (CGCC) Portfolio Guarantee Scheme (PGS) to offer guaranteed loans to local micro-, small- and medium-sized enterprises (MSME).
An agreement was signed to this effect on July 17 by Canadia Bank CEO and executive director Raymond Sia Say Guan and CGCC CEO Wong Keet Loong, to make it easier for MSMEs with little or no collateral to obtain credit from the lender for working or investment capital, allowing them to expand and make a greater contribution to Cambodia’s economic growth.
CGCC noted in a recent statement that it introduced the PGS on January 1, describing it as “a scheme under which guaranteed loan criteria are pre-agreed by CGCC and PFI [participating financial institutions] to enable the PFI to enrol multiple loans in PGS without having to get CGCC’s guarantee approval on each loan prior to loan disbursement”.
Thus, it explained, the PGS “enables quicker outreach and turnaround time than the previous Individual Guarantee Schemes (IGS)”.
At the signing ceremony, Canadia Bank’s Sia expressed optimism that the collaboration would “further our commitment to supporting the growth of [MSMEs] in Cambodia”.
CGCC’s Wong commented that the PGS “is targeted specifically for businesses under the retail and wholesale trade sector” and stressed that MSMEs “are vital contributors to Cambodia’s economy and employment opportunities”.
“Canadia Bank has been the top provider of guaranteed loans, and this partnership … will further cement our commitment to improve financial inclusion and sustainable growth of MSMEs,” he added.
The CGCC was established by Sub-Decree No 140/ANKR/BK on September 1, 2020, and its $200 million Business Recovery Guarantee Scheme (BRGS) was launched on March 29, 2021. The state-owned enterprise affirms that Canadia Bank was one of that scheme’s first bank PFIs.
CGCC announced that it had issued a total of 1,566 Letters of Guarantee (LG) for loans worth $132.74 million equivalent as of June 30, up from 1,275 LGs and $113.6 million at end-March. MSMEs accounted for 1,432 – or 91 per cent – of the LGs.
As of June 30, the outstanding guaranteed amount was $75.77 million out of the $105.07 million worth of loans covered by the LGs, as noted by the CGCC, remaining in the 70-80 per cent target range at 72.1 per cent.
Credit to: Phnom Penh Post
Signing Ceremony on Portfolio Guarantee Scheme Between CGCC and Canadia Bank
On July 17, 2023, the Credit Guarantee Corporation of Cambodia (CGCC) and Canadia Bank, one of the leading commercial banks in Cambodia, signed an agreement on Portfolio Guarantee Scheme to provide guaranteed loans to micro, small and medium enterprises for retail and wholesale businesses in the country.
The agreement between CGCC and Canadia Bank on Portfolio Guarantee Scheme aims to support business including Micro, Small and Medium Enterprises (SMEs) to enhance their quick access without CGCC evaluates on guarantee application from the Participating Financial Institution (PFI) to formal loans even without collateral or insufficient collateral pledges for both working capital and investment or business expansion. By leveraging their respective expertise, both institutions are committed to facilitating the growth and development of SMEs, which are vital contributors to Cambodia’s economy.
In 2021, Canadia Bank was one of the first banks to participate in the Business Recovery Guarantee Scheme (BRGS) led by CGCC under Cambodia’s government initiative to support the recovery of SMEs in various sectors during and post-pandemic. The Bank has been awarded by CGCC as one of the Top Performing Financial Institutions in Cambodia with the highest guaranteed loans disbursed with CGCC for 2022.
With its strong presence in the Cambodian financial sector, the agreement signed between CGCC and Canadia Bank will further enhance their credit cooperation which, in turn, will provide a positive impact to the SME ecosystem as well empower entrepreneurs by providing sustainable financial options for their business growth and expansion.
Mr. Raymond Sia, CEO and Board Director of Canadia Bank, expressed his enthusiasm about the partnership, stating, “We are thrilled to collaborate with CGCC to further our commitment to supporting the growth of SMEs in Cambodia. With this agreement, Canadia Bank hopes that SMEs business owners will have more sustainable financial access to enhance their business capability and efficiency for more sustained operations.”
Mr. Wong Keet Loong, CEO of Credit Guarantee Corporation of Cambodia, also excited of the cooperation. He said “This Portfolio Guarantee Scheme (PGS) is targeted specifically for businesses under the Retail and Wholesale Trade sector. It is designed to enhance lending to enable MSMEs in this sector to grow their business. The PGS reinforces both CGCC and Canadia Bank’s commitment to support the growth of MSMEs, which are vital contributors to Cambodia’s economy and employment opportunities.”
“Canadia Bank has been the top provider of guaranteed loans and this partnership will further solidify the Bank’s position as a trusted and reliable source of financing for businesses in this sector. This joint effort will further cement our commitment to improve financial inclusion and sustainable growth of MSMEs,” he added.
About Canadia Bank
Canadia Bank is a leading local and full-service commercial bank in Cambodia since 1991 and one of the largest commercial banks that holds commanding market shares in loans and deposits. In 2023, Canadia Bank was awarded “Best Retail Bank” by The Asian Banker and “The Best SME Bank” by the Digital Banker. The Bank has been recognized and awarded by The Asian Banker as “The Strongest Bank by Balance Sheet in Cambodia in 2019,” the “Best Managed Bank in 2022”, and “The Best Retail Bank” for 3 consecutive awarding years in 2020, 2021, and 2023.
As of April 2023, Canadia Bank has 68 branches and more than 400 self-service digital devices across Cambodia, such as ATMs, Cash Recycling Machines, Virtual Teller Machines, and Smart Card-Issuing Machines. For more information, please visit our website, www.canadiabank.com.kh.
About CGCC
CGCC is the first-ever credit guarantee corporation in Cambodia, established by the decision of Samdech Akka Moha Sena Padei Techo Hun Sen, Prime Minister as a state-owned enterprise under the technical and financial guidance of the Ministry of Economy and Finance. CGCC’s main mission is to provide credit guarantees to lenders on loans made to businesses based on international standards to share the risk with lenders and to improve financial inclusion.
CGCC 2nd Town Hall Meeting 2023 on “Milestones in Q2 2023 and Strategy Plan in Q3 2023”
On 14 July 2023, CGCC organized the second Annual Town Hall meeting, a gathering of all CGCC staff to report on progress and milestones to the Executive Committee (Exco) of CGCC as well as sharing with the staff on the second quarter of 2023 progress, especially on the strategy and action plan of some respective departments of the third quarter in 2023.
The 2nd Town Hall Meeting was attended by all CGCC staff and a guest of honor and a presentation by Mr. Lon Sam Ol, Director of Banking & MFI Supervision of the National Bank of Cambodia. This 2nd town hall meeting is not only for sharing the progress report and plans from all departments, but also for a dialogue platform to openly discussion and obtain recommendations from management on the direction of CGCC’s operations and vision in improving financial inclusion and develop SMEs in Cambodia.
Signing of a $3 million Portfolio Guarantee Agreement for Women Entrepreneurs Between CGCC and Prince Bank
On 13 July 2023 at Prince Tower, CGCC and Prince Bank signed a $3 million Portfolio Guarantee Agreement for women entrepreneurs. The Agreement is signed by Mr. Wong Keet Loong, Chief Executive Officer of CGCC, and Mr. Honn Sorachna, Managing Director and CEO of Prince Bank, with a participation of Lork Chum Teav Oknha Keo Mom, President of Cambodia Women Entrepreneurs Association (CWEA).
The Portfolio Guarantee Scheme (PGS) for Women Entrepreneurs of CGCC and Prince Bank is effective from 01 August 2023 which will enables Prince Bank to disbursed guaranteed loans to women entrepreneurs without having to get CGCC’s guarantee approval on each loan prior to loan disbursement. This PGS for Women Entrepreneurs will support quicker, easier, and more CGCC’s guaranteed loan disbursements through Prince Bank to women entrepreneurs who lack of collateral.
Mr. Wong Keet Loong, CEO of CGCC said “This USD3mil portfolio guarantee scheme (PGS) with Prince Bank was structured specifically to support women entrepreneurs in providing guaranteed loans. We hope that with the bank’s strong network, we can increase our guarantees to women-owned businesses. As at todate, CGCC has guaranteed 40% of its total guarantees of USD130mil to women-owned MSMEs ie. USD50mil.”
He added that “The woman scheme comes with lower interest rates and guarantee fees for the 1st year. These favorable terms will enable women MSMEs to obtain lower cost of financing.”
Mr. Honn Sorachna, Managing Director and CEO of Prince Bank Plc. stated “We are honored and excited to join the force with CGCC to boost the local economy by supporting the MSMEs segments, especially women MSMEs. Women are the cornerstone of a strong family foundation and in their community. Their involvement and contribution to commerce and the economy at large are very significant and very much lauded. women entrepreneurs with unique abilities and determination are admirable and should be emulated. They deserve the support and encouragement to grow from strength to strength. Under the Portfolio Guarantee Scheme (PGS), we aim to provide better liquidity with special conditions to women-owned micro, small, and medium enterprises to give them extra support for their working capital to invest and sustain their businesses. It’s always our top priority to support Cambodian individuals and businesses for their financial needs; we are trying harder to enhance our products and services and make them conveniently accessible to our Cambodians.”
Prince Bank has become CGCC’s Participating Financial Institutions (PFI) since 2021 and has actively utilized CGCC’s credit guarantees to address the MSMEs’ challenge of lacking collaterals by providing guaranteed loans. CGCC and Prince Bank hope that this PGS for Women Entrepreneurs will support Cambodian women entrepreneurs that are mainly MSMEs, the backbone of the economy.
About CGCC
CGCC is the first-ever credit guarantee corporation in Cambodia, established by the decision of Samdech Akka Moha Sena Padei Techo Hun Sen, Prime Minister as a state-owned enterprise under the technical and financial guidance of the Ministry of Economy and Finance. CGCC’s main mission is to provide credit guarantees to lenders on loans made to businesses based on international standards to share the risk with lenders and to improve financial inclusion.
About Prince Bank Plc.
Prince Bank Plc. started its business operations in 2015 as a private microfinance institution under the former name “Prince Finance Plc.” and was transformed into a commercial bank with license No. B 46 was granted by the National Bank of Cambodia on 18 July 2018. With a strong capital base, robust technological capabilities, solid expertise, and extensive knowledge of the local market, the bank aspires to become the industry leader by offering differentiated financial solutions through a mix of channels with great convenience to our customers. We are keen on contributing to the development of small and medium enterprises that constitute a key segment of our target customers. Currently, Prince Bank Plc. has 34 branches and 82 ATM locations nationwide.
Press Release – Prakas on Credit Risk for Capital Adequacy Ratios in Deposit-Taking Banks and Financial Institutions of National Bank of Cambodia
Credit Guarantee Corporation of Cambodia (CGCC) is pleased to inform the Participating Financial Institutions (PFIs) that on 29th June 2023 the National Bank of Cambodia (NBC) announced the implementation of “Prakas on Credit Risk for Capital Adequacy Ratios in Deposit-Taking Banks and Financial Institutions”. In the press release issued on the same day about this Prakas on Credit Risk for Capital Adequacy Ratios in Deposit-Taking Banks and Financial Institutions, NBC stated the purpose of this Prakas is to develop a comprehensive credit risk weight, which varies according to the type of credit, borrowers, or counterparties and reflect the level of risk that the institution may actually face in order to strengthen the effectiveness of risk management.
The press release of NBC also mentioned the implementation of prudent and well-balanced measures and careful consideration to promoting the development of the banking and financial sector and national economic growth, as well as to support the Royal Government of Cambodia in implementing relevant policies, including special attention to “Support credit guarantee mechanisms established by the Royal Government of Cambodia, such as the Credit Guarantee Corporation of Cambodia (CGCC), with a zero percent risk weight on the part of the exposure that is guaranteed in order to facilitate Micro, Small and Medium Enterprises in access to more sources of fund”.
CGCC is the first-ever credit guarantee corporation in Cambodia, established by the decision of Samdech Akka Moha Sena Padei Techo Hun Sen, Prime Minister as a state-owned enterprise under the technical and financial guidance of the Ministry of Economy and Finance. CGCC’s main mission is to provide credit guarantees to lenders on loans made to businesses based on international standards to share the risk with lenders and to improve financial inclusion.
Phnom Penh, 03 July 2023
NBC sets new capital, risk rules for banks, financial institutions
The National Bank of Cambodia (NBC) yesterday released two proclamations that set new requirements for depositing-taking banks and financial institutions to strengthen the quality of their capital to increase the effectiveness of preventing main banking risks and assess credit risks at lower rates to boost the economic growth by supporting the private sector in the economy.
The two proclamations launched include regulatory capital of deposit-taking banks and financial institutions and a proclamation on credit risks for capital adequacy ratio of deposit-taking banks and financial institutions, which have been prepared in accordance with international standards.
The two documents were issued as an improved part of the capital adequacy frameworks for depositing-taking banks and financial institutions in the context, development and vision of the banking and financial systems, laws and regulations that are applicable in Cambodia, which would contribute to increasing the public confidence on the country’s banking systems.
A technical official at NBC told Khmer Times yesterday that the first proclamation sets restructuring of components and methodologies of calculation of regulatory capitals of deposit-taking banks and financial institutions to enhance both quantity and quality of the capital to cover losses in case of going-concern and settlement of debts in case of gone-concern.
“The first proclamation sets the requirements for the acknowledgement of financial instruments in different classes that would help the target banks and financial institutions strengthen their capital and resilience against risks such as credit risks, operations risks and market risks, which would be able to protect depositors, debtors, investors and institutions themselves,” the official said.
The requirements would enable the financial instruments of deposit-taking banks and financial institutions in Cambodia to be acknowledged in tier 1 capital that would enable them to cover losses in the going-concern scenario or during operations, or tier 2 capital that enables them to cover losses on the gone-concern scenario or in process of operations closures.
Article 8 stipulates the components of the regulatory capital, saying that the total regulatory capital is composed of the tier 1 capital that includes common equity tier 1 capital, which is considered the best quality capital as it would enable those banks and financial institutions to cover immediate losses on the going-concern scenario with six sub-components including retained earnings, audited accumulated other comprehensive income and disclosed reserves.
The regulatory capital is composed of tier 2 capital which is its second component, according to the proclamation. “The requirements to acknowledge the regulatory capitals are set in the proclamation, but each or some requirements are applicable dependently on sub-components. Let’s say this requirement is for these sub-components. So, it is difficult to explain,” added the official.
However, the official pointed out that deposit-taking banks and financial institutions are required to fulfill 14 requirements for their regulatory capital to be acknowledged as the common equity tier 1 capital including capital instruments that are the last settlement in case of liquidation of the institution. “It is too technical to explain to others.”
He went to add that there are eight requirements or conditions for the acknowledgement of the capital of deposit-taking banks and financial institutions as tier 2 capital such as capital instruments that have at least five years of maturity and capital that is not guaranteed by issuers or relevant institutions or under any agreement that increase privilege in legal or economic payment same as depositors and general debtors of institutions.
The second proclamation lowers the highest risk weight rules from 100 percent or over 75 percent for registered micro, small and medium enterprises, 85 percent for businesses registered in agriculture, education and health care sectors, 80 percent for green finance projects and zero percent for government bond issuance and credit guarantee schemes such as Credit Guarantee Corporation of Cambodia (CGCC).
Chea Serey, NBC Deputy Governor, said last Thursday before the issuance of the two proclamations that these documents would contribute to the development of Cambodia’s economy as they would enable banks and financial institutions to release more loans to businesses that are registered with the Ministry of Commerce (MoC), General Department of Taxation (GDT) and other relevant institutions.
“The two proclamations will help small and medium enterprises receive finance at reasonable interest rates as they set incentive mechanisms for banks and financial institutions to release loans to [businesses in different sectors] agriculture, green financing and consumers-friendly loans such as school fee payment, transportation vehicle purchase, etc., but they have to be commercially registered and have proper accounting statements,” Serey added.
Credit to: Khmer Times, Publish on 04 July 2023
14th Board of Directors Meeting of Credit Guarantee Corporation of Cambodia (CGCC)
On 29 June 2023 at 2:00pm, CGCC organized the 14th Board of Directors Meeting at Rosewood Hotel under the chairmanship of H.E. Ros Seilava, Secretary of State of the Ministry of Economy and Finance, and Chairman of CGCC’s Board of Directors, with the presence of members of the Board of Directors and the state controller.
The agendas of this 14th Board of Directors Meeting included: (1) CGCC Progress Report, (2) Internal Audit Report on Centralized Operations, (3) PGS with Canadia Bank Plc., Sathapana Bank Plc., and Prince Bank Plc., (4) Establishment of Investment Committee, (5) Whistle Blowing Policy, and (6) Others.
CGCC’s Board of Directors Meeting is regularly organized to review, endorse, and approve CGCC’s activities and progress, especially the credit guarantee schemes, to ensure the transparency and efficiency of CGCC.