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The Credit Guarantee Corporation of Cambodia (CGCC) on Tuesday announced the extension of the Business Recovery Guarantee Scheme (BRGS) from 1 January 2023 until the scheme is fully utilised.

According to the CGCC press release, the BRGS aims to support businesses, including micro, small and medium enterprises (MSMEs) and large firms, by enhancing their access to formal loans from the Participating Financial Institutions (PFIs) for working capital, investment, and business expansion.

The BRGS, with a scheme size of $200 million, was first launched for the 29 March 2021 to 31 December 2022 period. As of 31 December 2022, approximately $89 million in loans, most without collateral, were sanctioned. Loans under the BRGS are guaranteed by the CGCC.

The CGCC received approval from Deputy Prime Minister, Minister of Economy and Finance Aun Pornmoniroth for the extension of the BRGS after updating some scheme features, including the scheme period, the definition of MSMEs and large firms, and the maximum loan amount for each guarantee.

The CGCC’s credit guarantee under the BRGS will continue to act as collateral for 70-80 percent of the loan amount borrowed from the PFIs, thus, reducing the physical collateral required from borrowers.

Wong Keet Loong, CEO of the CGCC, told Khmer Times, “The maximum guaranteed loan amount has been increased to combine both priority and non-priority sectors, like $300,000 for working capital and $500,000 for investment/business expansion for MSMEs, and $500,000 and $700,000, respectively, for large firms.”

On the benefit of this extension, he said, “an additional $111 million of guaranteed loans is available until the scheme is fully utilised. In addition to the 936 MSMEs who obtained guaranteed loans, this would support more MSMEs in obtaining loans for their businesses during the economic recovery.”

“The Cambodian-owned businesses can approach our 25 PFIs for guaranteed loans. The MSMEs must meet the PFIs loan criteria to be eligible for guaranteed loans,” he remarked.

Various credit guarantee schemes have played a crucial role in strengthening entrepreneurship and enhancing financial inclusion in Cambodia, especially during the Covid-19 pandemic, through the smooth disbursal of loans.

The CGCC has come up with three guarantee schemes so far — the Business Recovery Guarantee Scheme (BRGS) launched in March 2022, the Co-Financing Guarantee Scheme (CFGS) unveiled in September 2021 and the Women Entrepreneurs Guarantee Scheme (WEGS) launched in April 2022, besides the extension of the CFGS to tourism. Each scheme was specifically designed to target different market segments.

Credit to: Khmer Times, Publish on 05 January 2023

Maybank Cambodia in collaboration with the Credit Guarantee Corporation Cambodia (CGCC) organised two workshops over the last two months to strengthen the capacity and capabilities of over 100 SMEs and financial advisors by providing business insights and knowledge as well as imparting new skills, techniques and technologies to improve their business operations.

The SME Building Capacity & Capability workshops, which were held at the Maybank Tower, provided a platform for networking, giving SMEs opportunities to connect with like-minded peers across industries to develop new insights into building and strengthening their businesses.

Rath Sophoan, CEO of Maybank Cambodia said that the bank understands that SMEs are confronted with increasing difficulties and challenges post-pandemic and have limited access to timely and accurate information as well as the necessary skills to meet the rapidly evolving market to remain competitive and resilient.

“We have introduced a comprehensive programme to help SMEs, which is a strategic and collective initiative that the Bank commits, in addition to the continuous efforts to support them gain access to financial assistance. In line with our mission to Humanise Financial Services and upon the success of our workshops, we plan to organise several more in the future as we see this being beneficial not only to the SMEs but also towards boosting the economy as SMEs are the backbone of the country,” he added.

All entrepreneurs were exposed to various topics including business registration in Cambodia, the importance of financial discipline, branding and digital marketing, as well as the aspects of managing human resources, presented by subject-matter-experts and professionals by law firms, business consultants, advertising agencies and financial institutions.

Wong Keet Loong, Chief Executive Officer of CGCC, said, “Our partnership with Maybank has enabled both parties to help improve financial literacy to build SMEs’ business operations and provide upskilling and growth opportunities to all the participants. These workshops aim to serve as a platform to fuel the SME growth further in Cambodia.”

He further added that Maybank and CGCC will continue to support local SMEs through various means, including financing facilities, business support instruments and technical advisory based on best practices to support SME growth, productivity and innovation, as well as enhance the competitiveness of SMEs.

Credit to: Khmer Times, Published on 23 November 2022

The Ministry of Economy and Finance (MEF) and Credit Guarantee Corporation of Cambodia Plc (CGCC) are encouraging banks and microfinance institutions (MFI) to use credit guarantee mechanisms to boost financial inclusion and help expand small- and medium-sized enterprises (SME) by issuing loans to businesses that lack collateral.

In an August 18 workshop on the potential of credit guarantee projects to enhance financial inclusion for SMEs in Cambodia, MEF secretary of state Ros Seilava, who is also CGCC chairman, touched on a business recovery guarantee scheme (BRGC) that was launched by the government via CGCC in March last year.

As of July 2022, the scheme, which has been running for more than a year, has supported the issuance of about $57 million new loans to businesses or companies that lack collateral through participating financial institutions.

Although $57 million might seem like a small amount, he said it was the beginning of a change in lending habits without relying on collateral in Cambodia’s credit market.

Not only in Cambodia, Seilava said credit guarantee mechanisms are an intervention policy tool used to support financing in economies in countries around the world.

“I hope that the National Bank of Cambodia [NBC] will set out a relevant regulatory framework and policy to drive and encourage banks and MFIs to use credit guarantee mechanisms to boost the financial inclusion and development of small- and medium-sized enterprises,” he said.

Seilava urged stakeholders to discuss challenges, especially banking and financial institutions and business owners, to find solutions to the comprehensive use of credit guarantee mechanisms.

In addition, a study on the terms and procedures of CGCC is necessary to consider adjustments and secure opportunities to cooperate between CGCC and development partners, as well as other stakeholders to develop credit guarantee projects to support specific priority sectors such as agriculture, industry and tourism, he stressed.

Meanwhile, NBC assistant governor Chea Serey said that in order to encourage banks or MFIs to use this credit guarantee mechanism to the maximum, SMEs themselves must strive to strengthen their businesses after obtaining a loan, especially through proper registration, so that they can get a credit guarantee from CGCC.

“What I see in Cambodia is that the challenges for SMEs in accessing financial services is that they are out of the system. Most SMEs in Cambodia are not yet properly registered, which makes it difficult for them to get a bank loan,” she said.

CGCC CEO Wong Keet Loong said that from the beginning of the third quarter of 2022, CGCC has expanded its credit guarantee to the whole country, even in remote provinces, thanks to the extensive branch network of participating financial institutions (PFI) nationwide.

“However, the CGCC still needs to do more to ensure that financial inclusion is further improved for the benefit of businesses across the country,” he said.

Song Kheng Lay, executive vice-president and chief operating officer of Canadia Bank Plc, believes that there is a need for credit guarantees to support banks to provide more loans to businesses or companies, especially those that lack collateral.

“Canadia Bank has developed a guaranteed lending strategy as well as procedures to apply for loans from SME banks to come to banks in order to obtain effective loans,” she said.

Data from the Department of SMEs of the Ministry of Industry, Science, Technology and Innovation showed that as of July 31, 2022, a total of 43,813 SMEs were properly registered out of “more than 520,000” SMEs.

Credit to: The Phnom Penh Post, August 18, 2022

The head of the National Bank of Cambodia said Cambodia’s SMEs face a string of challenges, adding a scheme is available to offer financial support to those struggling to access credit.

The Director General of the National Bank of Cambodia, Chea Serey, said on Thursday that Cambodian SMEs face a number of challenges that range from a lack of human resources and market capitalization, to access to credit.

“There is a lot of SME competition, especially in Cambodia. If our SMEs are small, it will be difficult to compete in ASEAN,” Serey said at a conference to raise awareness of the importance of credit guarantees in assisting banks to make more loans to businesses, particularly those without collateral.

“So, if we do not fortify ourselves in Cambodia when the border opens, it will be easier to transport goods to and from each other, making our goods difficult to sell,” Serey said.

She added that in recognition of the importance of SMEs in the economy and their challenges in access to finance from banking and financial institutions, the government established Credit Guarantee Schemes to ensure SMEs receive credit.

“I think it is a good solution. Also, it is a short-term solution for SMEs that have not been recognized or registered,” she said. “This solution is critical and timely for SMEs in the context of Covid-19.”

The conference was hosted by the Ministry of Economy and Finance under the theme, “Credit Guarantee Schemes’ Potential to Strengthen SME’s Financial Inclusion in Cambodia”.

During the conference, Ros Seilava, Secretary of State at the Ministry of Economy and Finance, said the forum is important for raising awareness of the credit guarantees through discussion and experience sharing among relevant stakeholders. More than one year ago, the government launched the public credit guarantee scheme by establishing CGCC.

“As of July 2022, the CGCC had supported the disbursement of approximately $57 million in new loans, with credit guarantees to businesses lacking collateral via the Participating Financial Institutions (PFIs),” he said.

“Even though $57 million is a small sum, it marks the beginning of new lending practices in Cambodia’s credit market that do not rely on collateral,” Seilava said.

Meanwhile, Wong Keet Loong, Chief Executive Officer of CGCC, said that as of the beginning of Q3 2022, CGCC has expanded its guaranteed coverages to include all provinces, including remote provinces.

“However, more still needs to be done to improve financial inclusion for various groups of businesses in other parts of the country,” he said.

The conference included representatives from the government, development partners, financial institutions, business associations, and business owners, particularly SMEs.

Small and medium-sized enterprise (SME) development is a crucial priority in ASEAN countries’ strategies, including Cambodia. SMEs are critical to Cambodia’s economy, accounting for 70 percent of employment, 99.8 percent of businesses, and contributing 58 percent of the GDP.

SMEs are often regarded as the backbone of Cambodia’s economy and engine of economic development.

Credit to: kiripost, August 18, 2022

Click to know more about: Press Release Conference on “Credit Guarantee Schemes’ Potential to Strengthen SME’s Financial Inclusion in Cambodia”

Various credit guarantee schemes have played a crucial role in strengthening entrepreneurship and enhancing financial inclusion in Cambodia, especially during the Covid-19 crisis, through smooth disbursal of loans, said top officials who gathered yesterday for a conference on ‘Credit Guarantee Schemes’ Potential to Strengthen SME’s Financial Inclusion in Cambodia.’

Wong Keet Loong, CEO of the Credit Guarantee Corporation of Cambodia (CGCC) said it was incorporated on November 3, 2020, with two main policy frameworks. First to help viable businesses by providing access to formal financing and second to ensure sustainability for the CGCC’s operations.

The conference, jointly organized by the Ministry of Economy and Finance (MEF) and CGCC, aimed to raise awareness of credit guarantee benefits for SMEs.

Wong said that the CGCC has come up with three guarantee schemes so far — the Business Recovery Guarantee Scheme (BRGS), launched in March 2022, the Co-Financing Guarantee Scheme (CFGS), in September 2021 and the Women Entrepreneurs Guarantee Scheme (WEGS) in April 2022, besides the extension of the CFGS to tourism. “Each scheme was specifically designed to target different market segments,” he said.

He added that CGCC has succeeded to expand its guarantee scheme all over the country, even in the remotest provinces, thanks to the vast branch networks of the participating financial institutions (PFIs). “However, more still needs to be done to ensure that financial inclusion is improved for different groups of businesses across the country,” Loong said.

“We also see a positive trend among female borrowers, who get loans without collateral. There were only 43 women-owned SME who borrowed in 2021, but by the end of July 2022, there are 197 of them. This was due to the PFIs’ women-supported loan products and CGCC’s efforts in reaching out to more women-owned SMEs for uncollateralized loans,” he noted.

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As of now, CGCC has 23 PFIs with more than 1,000 branches across the country, yet only 18 PFIs have applied for credit guarantees so far. “I firmly believe that this conference could raise awareness among all the stakeholders about the benefits and potential of credit guarantee. I am looking forward to seeing more credit guarantee requests by PFIs after this event,” Loong said.

Ros Seilava, Secretary of State of the Ministry of Economy and Finance and Chairman of CGCC, said that the CGCC has so far provided a credit guarantee for $57 million in loans disbursed by PFIs.

Based on data from the World Bank, 41 countries launched 57 credit guarantee schemes during the Covid-19 crisis in 2020 to boost lending from financial institutions to businesses through risk sharing.

Credit to Khmer Times: August 18, 2022