Credit Guarantee Corporation of Cambodia (CGCC) and the Branch of Kasikornbank Public Company Limited (Phnom Penh) have signed the Credit Guarantee Agreement to support micro, small and medium-sized enterprises (MSMEs).
The signing ceremony was held at CGCC’s office in the presence of Ros Seileva, Secretary of State of the Ministry of Economy and Finance and Chairman of CGCC, Cherdkiat Atthakor, Ambassador of Thailand to Cambodia and Suwat Techawatanawana, Executive Vice President of Kasikornbank Thailand.
Wong Keet Loong, Chief Executive Officer of CGCC, said that the bank’s branch in Cambodia can tap on their experience in providing guaranteed loans in Thailand.
“The collaboration also opens up opportunities for us to explore cross-border guarantees between businesses in Thailand and Cambodia. We have also plans to collaborate with the Thai Credit Guarantee Corporation, which has more than 30 years of experience, towards the end of this year,” he said.
Ritthiwut Watthanachai, General Manager of Kasikornbank in Phnom Penh, said that the initiative seamlessly aligns with the bank’s business plan for the next phase.
“The partnership with CGCC will be the key enabler for us in extending our reach to a broader entrepreneur base while improving our service capabilities. As the first Thai bank to join the credit guarantee scheme, this partnership underlines Kasikornbank’s aspiration and commitment to supporting the government’s vision for SME development,” he said.
CGCC aims to improve financial inclusion and develop MSMEs with the main mission of providing guarantees for loans given to MSMEs through Participating Financial Institutions (PFIs).
The Kasikornbank in Phnom Penh now become one of the 27 PFIs of CGCC, committing to assisting business entities in line with the Cambodian government’s direction to support MSMEs.
The CGCC has provided credit guarantees of $139.5 million to 1,648 businesses for their working capital expansion as of July 2023.
The Credit Guarantee Corporation of Cambodia (CGCC) and Kasikornbank Public Co Ltd’s (KBank) Phnom Penh branch have formalised a credit guarantee agreement. This move aims to enhance confidence and extend guaranteed financing to business proprietors, particularly micro, small and medium-sized enterprises (MSME).
Among those present at the signing ceremony at the CGCC headquarters in Phnom Penh were Ros Seileva, chairman of the CGCC and secretary of state for the Ministry of Economy and Finance, Thai ambassador Cherdkiat Atthakor and KBank Thailand executive vice-president Suwat Techawatanawana.
Wong Keet Loong, the CEO of CGCC, expressed his enthusiasm about the partnership.
“We’re honoured to collaborate with a top-tier bank to provide credit guarantees to bolster MSME financing in Cambodia,” he stated.
He highlighted the extensive experience of the Thai banking sector in guaranteed loans and hoped this would translate to more financing opportunities for Cambodian businesses.
“This partnership paves the way for cross-border guarantees between Thai and Cambodian enterprises. We’re looking to collaborate and learn from the Thai Credit Guarantee Corp, seasoned with over 30 years of expertise, later this year,” Loong added.
Ritthiwut Watthanachai, the general manager of KBank Phnom Penh, emphasised the strategic importance of Cambodia in the growth plan of the Bangkok-headquartered KBank, one of Thailand’s premier financial institutions formerly known as Thai Farmers Bank.
“Our alliance with CGCC significantly broadens our outreach to entrepreneurs, enhancing our service capabilities. Being the first bank to participate in the credit guarantee plan showcases our commitment to fostering MSME growth in alignment with the government’s vision,” Watthanachai said.
CGCC’s core mission is to augment financial inclusivity and foster MSME growth by ensuring loans through Participating Financial Institutions (PFI) for MSMEs. On the other hand, KBank Phnom Penh offers an array of financial services and solutions catering to individuals and enterprises.
Credit Guarantee Corporation of Cambodia (CGCC), a state-owned enterprise under the Ministry of Economy and Finance was established in November 2020. Since it started operations in March 2021, CGCC has launched several credit guarantee products to support loans extended to MSMEs through its participating Financial Institutions (PFIs). With CGCC’s credit guarantee, it has brought a positive impact on the economic activities of MSMEs with credit additionality of approximately USD145mil guaranteed loans. CGCC has supported financing to about 1,700 MSMEs who provide jobs to more than 27,000 workers.
The impact of CGCC has been steadily growing. Many PFIs are seeing the benefits of providing guaranteed loans as a risk-sharing mechanism and for capital management purposes, as guaranteed loans will carry a zero-risk weight from 2024 onwards. With the support of CGCC, PFIs will be able to extend more credit to business entrepreneurs.
The accomplishments of CGCC have been recognised by the SME Finance Forum with an Honorable Mention in the “Product Innovation of the Year” category of the Global SME Finance Awards 2023. The awards presentation was held in Mumbai recently, endorsed by the G20’s Global Partnership for Financial Inclusion (GPFI), capturing the effective and successful practices of institutions, honouring the innovative products and services for SME clients that have achieved impressive results in expanding finance and services to SMEs and the institutions that undertake those efforts.
Wong Keet Loong, CEO of CGCC, commented “We are honoured to receive this recognition for the work we have done at CGCC. This achievement is testament to our part in supporting MSMEs in getting loans to grow their business”. He added that “this award is dedicated to all CGCC staff who have been committed to being part of a state-owned enterprise to play a role in supporting the growth of MSMEs and nation building. My salute to them for their passion and dedication and I hope that this recognition will continue to inspire them to excel further”.
CGCC has been recently accredited by SERC to be Cambodia’s first bond guarantee institution. With that, CGCC is now able to support all segments of businesses from small to large enterprises in obtaining financing. The credit guarantee is an effective financial tool to improve financial inclusion.
The Securities and Exchange Regulator of Cambodia (SERC) under the Non-Bank Financial Services Authority (FSA) of the Ministry of Economy and Finance (MEF) has accredited the state-owned Credit Guarantee Corporation of Cambodia (CGCC) as the country’s first guarantor for bond issuance to support local companies in raising funds, said a statement.
The statement obtained by Khmer Times last Friday pointed out that the SERC issued a formal letter to accredit CGCC as Cambodia’s first bond issuance guarantor on August 22, 2023, which will play an important role in the development of the securities sector in the country through being a third party in making payments of timely interest and principal.
CGCC has developed a policy framework on bond guarantee that was approved by Deputy Prime Minister and Minister of MEF Aun Pornmoniroth on May 17, 2023, in response to the sustainable development of Cambodia’s financial market through the company’s delivering guarantee on bond issuance services to corporations to raise funds for business development.
“The guarantee on bond issuance service can provide further support to encourage bond issuance by local companies, attract investors to invest in corporate bonds, increase the liquidity of riel from the bond issuance and improve the credit rating of corporate bonds, in which response to the sustainable development of the financial market,” said the statement.
Sou Socheat, Director General of SERC, told Khmer Times last Friday that accrediting the CGCC as a guarantor is another milestone for our bond market development and the presence of CGCC in the securities market is expected to help to boost the bond market development in Cambodia through building more market confidence and lower the issuance cost.
“As for our regulation, we cover only corporate bonds but we also don’t prohibit [the guarantor] from guaranteeing the government bonds,” said Socheat, when asked whether CGCC or a bond guarantor can guarantee government bonds or not. “So, it should be their answer if they want to provide guarantee to government bond,” Socheat pointed out.
Wong Keet Loong, CEO of CGCC, said that CGCC has become the first bond guarantee institution in Cambodia to corporate bonds listed on the country’s stock market Cambodia Securities Exchange (CSX), which is a step towards developing the bond market in Cambodia and the company will apply for a credit rating from the Rating Agency of Cambodia.
“Private sector businesses can now raise funds via issuing a bond to support their business expansions [as] bond issuance is another option for private sector companies to obtain funds besides loans from financial institutions,” said Keet Loong, adding that a credit rating will enhance the bond rating of the corporate bond that is guaranteed by CGCC as the guarantor.
“With our guarantee, bond investors will have added confidence in investing in corporate bonds. Local financial institutions including insurance companies can now become bond investors with guarantees. As a local bond guarantor, we hope to attract more foreign funds to the stock exchange,” said Keet Loon. CGCC gets technical and financial support from MEF.
Ros Seilava, Secretary of State of MEF, said allowing CGCC to expand its business to bond guarantee is a long-term consideration of the government to make full use of CGCC’s role to participate in the development of the bond market through guarantee on bond issuance in addition to CGCC’s on-going implementation on loan guarantee in the banking sector.
“[It] reflects the government’s strong commitment to ensure the sustainability of the company’s businesses to support the development of small and medium enterprises in our country,” said Seilava, who is also the chairman of CGCC with its primary mission to provide credit guarantee to improve financial inclusion and support the growth of SMEs in Cambodia.
Wing Bank (Cambodia) Plc, Credit Guarantee Corporation of Cambodia (CGCC), and Federation of Association for Small and Medium Enterprises of Cambodia (FASMEC) have forged an impactful strategic partnership—a visionary move aimed at boosting the growth of Small and Medium Enterprises (SMEs) in Cambodia.
Wing Bank, CGCC, and FASMEC to Offer Guaranteed Loans and Market Accessibility to SMEs
The collaboration is a strategic effort to address collateral challenges faced by SMEs when applying for bank loans and enhance financial literacy among the SMEs, exclusively for FASMEC members across the Kingdom. This will be achieved by providing financial solutions by Wing Bank on a collateral-free basis and secured with credit guarantees from the state-owned CGCC.
CEO of CGCC, Wong Keet Loong, said, “We are excited to partner with Wing Bank and FASMEC to support FASMEC’s SME members in increasing their access to loans through potential guarantees.”
Wing Bank, CGCC, and FASMEC to Offer Guaranteed Loans and Market Accessibility to SMEs
“This partnership will provide valuable resources for FASMEC, enabling their members to grow and succeed by accessing financing and improving financial literacy, aligning with our goals at CGCC,” Wong highlighted.
CGCC, the first state-owned credit guarantee institution operating under the Ministry of Economy and Finance, aims to bolster local businesses by offering timely credit support. As of July 2023, CGCC has successfully granted credit guarantees amounting to $139.5 million, benefiting 1,648 enterprises. Nearly 92 per cent of these are micro, small, and medium-sized enterprises (MSMEs). In comparison, the remaining 8 per cent are larger businesses.
“Through our innovative financial solutions and partnership with CGCC and FASMEC, we are committed to empowering SMEs with greater access to finance,” said Han Peng Kwang, CEO of Wing Bank. “By providing flexible banking services and credit support, we are enabling SMEs to seize growth opportunities, drive innovation, and contribute to the overall prosperity of Cambodia.”
SMEs who are members of FASMEC can access not only finance guaranteed by CGCC through Wing Bank but also enjoy broader opportunities to connect with potential customers, vendors, and suppliers. This is made possible through Wing’s ecosystem.
Wing Bank provides convenient retail solutions through its WingPay platform, supporting transactions within the Wing ecosystem’s B2B and B2C platforms, including Wingmarket, WingAgri, and Wingmall.
Wingmarket acts as a supply chain solution, streamlining supply chain management for SMEs and corporate businesses. WingAgri serves as a reliable agriculture e-commerce platform, connecting farmers with buyers through a virtual marketplace. Wingmall, a trusted B2C platform, is widely used by numerous restaurants in Cambodia, ensuring seamless transactions and enhancing the customer experience.
The strategic partnership between CGCC, FASMEC, and Wing Bank is poised to foster a supportive environment for financial accessibility, effectively addressing the hurdles SMEs encounter in securing loans, and expanding their market accessibility.
“We are delighted to partner with Wing Bank and CGCC, as it presents a remarkable opportunity for FASMEC members SMEs who face challenges in accessing finance due to a lack of collateral,” said Okhna Te Taing Por, President of FASMEC. “This partnership will enable them to expand their businesses and achieve substantial growth.”
According to local media reports, the Ministry of Industry, Science, Technology, and Innovation registered 43,974 small and medium enterprises (SMEs) last year. These registered SMEs provided 444,504 jobs for Cambodian individuals. SMEs comprise about 90 per cent of all enterprises, contributing to 58 per cent of the GDP and employing over 70 per cent of the workforce.
FASMEC Members can conveniently visit any Wing Bank branches to apply for a loan, where dedicated staff are ready to assist them with all their financial needs. The members can also approach Wing Bank staff during the training sessions organized by FASMEC throughout the country.
Credit to: Khmer Times, Published on 23 August 2023
The Credit Guarantee Corporation of Cambodia (CGCC) provided credit guarantees of $139.5 million to businesses for their working capital expansion as of July 2023.
The credit guarantee has been provided to 1,648 businesses, according to a report on Friday.
CGCC said in a statement that the total amount of outstanding guaranteed loans was $107.51 million, while the total amount of outstanding guaranteed amount was $77.48 million.
There are 1,510 micro, small and medium-sized businesses (MSME) and 138 large businesses get their loan guaranteed, the report said, adding that about 677 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.
Under the CGCC’s scheme, more than 30 participating financial institutions (PFIs) participate in providing credit as working capital investment and business expansion to SMEs.
Rath Sophoan, CEO and Country Head of Maybank Cambodia, said more credit has been disbursed to SMEs as banks and SMEs have learnt from each other to find the common points of financial assessments.
“With the economy recovering to get back to normal, it is time for SME growth. It requires financing solutions and more banks will increase providing credit to SMEs as banks and SMEs have worked together to find solutions and they understand each other more,” Sophoan said at a forum on supporting SMEs on legal and financial insights for sustainable growth at Olympia City Hotel on Friday.
The credit guarantee scheme has contributed to 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.
Credit to: Khmer Times, Published on 21 August 2023
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.
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.
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.
Maybank Cambodia, and Credit Guarantee Corporation of Cambodia (CGCC) have entered into a strategic partnership with Business Network International (BNI), and Cambodia Women Enterprise Association (CWEA) with an intent to support the local small and medium sized enterprises (SMEs) in the Kingdom through SME Building Capacity & Capability Programme (BCC).
Under the MOU, Maybank Cambodia, CGCC, BNI, and CWEA will collaborate to provide trainings and workshops to the members of BNI, and CWEA, and other participating SMEs to help them expand their businesses. The trainings will cover a range of topics relating to financial literacy and business operation.
The MOU will also pave the way for the participating SMEs’ long-term social and business growth through networking sessions, technical and knowledge sharing, and incentivised rates offered by Maybank Cambodia.
The MOU was inked at Maybank Tower and presided over by Rath Sophoan, Chief Executive Officer of Maybank Cambodia, Wong Keet Loong, Chief Executive Officer of CGCC, Kruy Rithy, President of BNI-Super, and Chea Ratha, Vice President of CWEA and witnessed by Dr Sok Siphana, Founding Partner of SokSiphana&associates and Chairman of Asian Vision Institute.
Sophoan, CEO of Maybank Cambodia said, “This MOU and BCC Programme signify Maybank’s continuous commitment to supporting the growth of SMEs in Cambodia. We believe that by providing training in capacity and capability building as part of the financial literacy programme, we are equipping SMEs with the right tools to sustain their business, thus contributing to the Kingdom’s overall economic development.”
Wong, Chief Executive Officer of CGCC said “We believe that the BCC Programme will be a valuable resource for SMEs in Cambodia and will help our entrepreneurs to grow and succeed with the broader opportunities to access to financing and improve financial literacy, which is aligned with our goals at CGCC”
Ratha, Vice President of CWEA endorsed “we are delighted to participate in this initiative, as it aligns with our mission of empowering women entrepreneurs through upskilling and networking.”
Rithy from BNI Super also expressed his optimism on the training. He said “We are confident that this partnership will be mutually beneficially, as it will allow our members to expand their networks, develop new skills, and grow their businesses.”
