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No Lida Appointed as CEO of Credit Guarantee Corporation of Cambodia

Posted on by Sorn Chhorvyvatey

Cambodia Investment Review

The Credit Guarantee Corporation of Cambodia (CGCC) has appointed Mr. No Lida as its new CEO during a formal ceremony held at Oakwood Premier Phnom Penh. The event was presided over by H.E. Ros Seilava, Secretary of State of the Ministry of Economy and Finance (MEF) and Chairman of CGCC, and attended by more than 100 participants, including members of CGCC’s Board of Directors, local and international partners, financial institutions, and business associations. The event marked the official transition of leadership from Mr. Wong Keet Loong, who has led CGCC since its inception.

Mr. Wong, who has been instrumental in building CGCC’s foundation, expressed his gratitude during the ceremony, stating, “I’m honored to have had the opportunity to lead CGCC from its inception to where it is today. CGCC has achieved many milestones, from being the first credit guarantee and bond guarantee institution in Cambodia. It will continue to play a critical role in developing the growth of MSMEs by improving financial access and financial literacy.” Under his leadership, CGCC launched several key initiatives aimed at improving access to credit for small and medium enterprises (SMEs), a cornerstone of Cambodia’s economic development.

New Leadership and Vision

Mr. No Lida, who served as CGCC’s Deputy CEO for the past four years, officially took over as CEO following his appointment, confirmed by Sub-Decree No. 872 ANKR.TT. This decision was approved by Prime Minister Samdech Moha Borvor Thipadei Hun Manet, based on the recommendation of H.E. Dr. Aun Pornmoniroth, Deputy Prime Minister and Minister of the MEF. Mr. No has been a key figure in the development of CGCC and brings more than a decade of experience from his time at the Ministry of Economy and Finance, where he gained significant experience in financial policy and management.

In his acceptance speech, Mr. No stated, “I am deeply honored to have earned the trust of the Board of Directors of CGCC, the Deputy Prime Minister, Minister of Economy and Finance, and most importantly, Samdech Moha Borvor Thipadei Hun Manet, Prime Minister of Cambodia, who appointed me as the CEO of CGCC. I am fully committed to doing my best for CGCC. I will utilize all my abilities to bring CGCC forward as a merit and principle-based institution and always uphold CGCC’s core values of TRUSTS – Trustworthy, Responsible, United, Sustainable, Transparency, and State Policy-Oriented.”

Launch of Sustainable Green Financing Facility

Alongside the leadership transition, CGCC also officially launched the Sustainable Green Financing Facility (SGFF) during the ceremony. This blended financing model, developed in collaboration with the United Nations Development Program (UNDP), aims to support green sector investments in Cambodia. The SGFF will enable development partners and financial institutions to establish a blended financing fund with CGCC, providing capital for green initiatives at favorable terms. The facility is designed to support sustainable development goals by offering financing options to businesses working in the green economy.

Read more: SERC and CGCC Sign MoU to Promote Guaranteed Bonds in Cambodia

As of the end of August 2024, CGCC had provided guarantees for 2,678 loan accounts, amounting to approximately USD 225 million. The organization, which was established in November 2020, continues to play a crucial role in supporting Cambodia’s SMEs, particularly in improving access to financing and promoting financial literacy.

Mr. No Lida’s appointment as CEO is expected to further strengthen CGCC’s position in the financial sector and drive its mission to support the growth of SMEs and green investment opportunities across Cambodia.

 

Credit to: Cambodia Investment Review, Published on 04 October 2024

 

Appointment and Transfer Ceremony of CEO of CGCC

Posted on by Sorn Chhorvyvatey

On 27 September 2024, Credit Guarantee Corporation of Cambodia (CGCC) organized the “Appointment and Transfer Ceremony of CEO of CGCC”, presided over by H.E. Ros Seilava, Secretary of State of the Ministry of Economy and Finance (MEF), Chairman of CGCC, and honorable presence of the members of Board of Directors (BoDs) of CGCC, local and international partners, financial institutions, business associations, and related stakeholders approximately​ more than 100 participants at the Oakwood Premier Phnom Penh.

This ceremony marked Mr. Wong Keet Loong‘s official farewell and the announcement of CGCC’s new CEO. It was organized to express CGCC’s gratitude for Mr. Wong’s participation in establishing and leading CGCC as the CEO and an opportunity to express his appreciation for related stakeholders’ support and collaboration during his tenure, and also to officially announce the appointment and transfer of the CEO of CGCC through the Sub-Decree No. 872 ANKR.TT, highly approved by Samdech Moha Borvor Thipadei Hun Manet, Prime Minister of the Kingdom of Cambodia, with the recommendation from H.E. Akka Pundit Sopheacha Aun Pornmoniroth, Deputy Prime Minister, Minister of MEF, to appoint Mr. No Lida to be the CEO of CGCC, a key person in the development of CGCC and leading CGCC as the deputy CEO in the last 4 years, and previously served at the MEF for more than 10 years with full of experiences and capacity to continue leading CGCC.

Through this ceremony, CGCC also officially launched the “Sustainable Green Financing Facility (SGFF),” a blended financing model developed in collaboration between CGCC and the United Nations Development Program (UNDP), which will enable development partners and Participating Financial Institutions (PFIs) to establish a blended financing facility with CGCC to provide financing to green sector investments in favorable terms to support the Sustainable Development Goals (SDG). The launching ceremony was highly witnessed by H.E. Chairman and members of the BoDs of CGCC, Mr. Shakeel Ahmad, Deputy Country Representative of UNDP, and CEO of CGCC.

H.E. Ros Seilava mentioned, “The success and growth of CGCC so far have not come by chance; it has come from the professional roles, responsibilities, and commitment of all CGCC management and staffs at all levels, especially the support from good cooperation of all stakeholders, including the government institutions, development partners, associations, participating financial institutions, and SMEs.”

Mr. Wong Keet Loong remarks, “I’m honored to have the opportunity to lead CGCC from its inception to where it is today. CGCC has achieved many milestones, from being the first credit guarantee and bond guarantee institution in Cambodia. It will continue to play a critical role in developing the growth of MSMEs by improving financial access and financial literacy.”

Mr. No Lida mentioned, “I am deeply honored to have earned the trust of the Board of Directors of CGCC, the Deputy Prime Minister, Minister of Economy and Finance, and most importantly, Samdech Moha Borvor Thipadei, HUN MANET, Prime Minister of Cambodia, who appointed me as the CEO of CGCC. I am fully committed to doing my best for CGCC. I will utilize all my abilities to bring CGCC forward as a merit and principle-based institution and always uphold CGCC’s core values of TRUSTS – Trustworthy, Responsible, United, Sustainable, Transparent, and State Policy-Oriented.”

CGCC was incorporated in November 2020 and launched the first credit guarantee scheme on 29 March 2021. As of the end of August 2024, CGCC had approved 2,678 guaranteed accounts on guaranteed loans amounting to approximately USD 225 million.

 

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The Signing of MOU between SERC and CGCC and Workshop on “Benefits and Opportunities of Issuing Guaranteed Bonds in Cambodia”

Posted on by Sorn Chhorvyvatey

In the Morning of Friday, August 30, 2024, with the honor permission from H.E. Dr. Aun Pornmoniroth, Deputy Prime Minister, Minister of Economy and Finance and Chairman of the Non-Bank Financial Services Authority (FSA), H.E. Sou Socheat, Delegate of the Royal Government in Charge as Director General of the Securities and Exchange Regulator of the  Cambodia (SERC) and Mr. Wong Keet Loong, Chief Executive Officer of Credit Guarantee Corporation of Cambodia (CGCC) signed a Memorandum of Understanding (MoU) on “Collaboration in Promoting the Development and the Issuance of Guaranteed Bonds” and co-organized the workshop on “Benefits and Opportunities of Issuing Guaranteed Bonds in Cambodia” under the high presidency of H.E. Ros Seilava, Secretary of State of the Ministry of Economy and Finance and Chairman of CGCC and Vice Chairman of the Board of FSA at FSA building.

This MoU signing ceremony was organized to promote the development of securities sector and the issuance of guaranteed bonds by supporting companies and financial institutions to obtain additional capital through the issuance of bonds including green bonds, social bonds, sustainability-linked bonds, and sustainability bonds which are supported and guaranteed of repayment in case default by local guarantor in order to enhance local capital mobilization more effectively. Back to back with this MoU signing ceremony, both institutions also co-organized the workshop on “Benefits and Opportunities of Issuing Guaranteed Bonds in Cambodia” in order to raise awareness and disseminate the requirements to obtain guarantees for bonds and for small and medium enterprises (SMEs) and related institutions as well as highlight the benefits and opportunities of issuing guaranteed bonds.

In this event, H.E. Delegate stated that “Through today’s MoU, it will attract more companies, including SMEs, to seek financing through the securities market, and will also provide additional benefits for listed companies having demands for additional sources of financing in the form of bond issuance or other forms of debt, with the opportunities to obtain guarantee with special rate.”

Mr. Wong Keet Loong also stated that “As the first and only bond guarantee institution in Cambodia, CGCC will play a key role in developing the growth of bond issuance listed on the Cambodia Securities Exchange (CSX). The credit rating of CGCC at khAAA will enhance the credit rating of the issuer thus giving added confidence to bond investors. This MoU with SERC is strategic to develop and work towards enhancing the securities framework to promote higher bond issuance to raise funding and attract more domestic and foreign investors.”

H.E. Ros Seilava​ has added that “This MOU will enable both parties to achieve the shared goal in terms of mutually supporting SERC for the development of the bond market, and CGCC to be the leading bond guarantee institution in Cambodia for improving financial inclusion and developing SMEs in Cambodia. At the same time, this cooperation will bring a positive impact on the bond market in Cambodia by encouraging the issuance and investment of more bonds, including green bonds, social bonds, and sustainable bonds.”

This event was attended by senior representatives including: General Secretariate of FSA and regulators under FSA, CSX, Cambodia Association of Securities Firms, Cambodia Chamber of Commerce, Young Entrepreneurs Association of Cambodia, the Association of Bank in Cambodia, Rating Agency of (Cambodia) Plc., listed companies and potential listed companies and media partners with a total of 100 participants. The workshop was sharing by resources speakers who enrich of professional experiences from SERC, CGCC, Telcotech LTD., Royal Group Securities Plc. and Prudential (Cambodia) Life Assurance Plc.

 

Means of Contact:

SERC

Research, Training, Securities Market Development and International Relations Department via mobile number (855) 95 775 772 (Khy Pochchhing) or Email: [email protected]

CGCC

Division: Strategy and Business Development Department via mobile number (855) 78 222 186 (Sorn Chhorvyvatey) or Email: chhorvyvatey.sorn@cgcc.com.kh

 

About SERC

SERC is an authority to supervise, monitor and develop the securities sector in the Kingdom of Cambodia that having seen the Preah Reach Kram No. NS/RKM/0121/003 dated January 16, 2021 that promulgate the Law on the Conduct and the Organization of the Non-Bank Financial Services Authority and having seen the Preah Reach Kram No. NS/RKM/ 1007/028 dated October 19, 2007 that promulgate the Law on The Issuance and Trading of Non-Government Securities and Anukret No. 97/ANKR/BK dated July 23, 2008 on the Organizing and Functioning of the Securities and Exchange Commission of Cambodia. SERC has its official website: www.serc.gov.kh and official Facebook page: www.face​book.​com/serc.gov.kh.

 

About CGCC

CGCC is the only credit guarantee corporation in Cambodia, established by the decision of Samdech Akka Moha Sena Padei Techo Hun Sen, as a state-owned enterprise under the technical and financial guidance of the Ministry of Economy and Finance. The primary mission of CGCC is to provide credit guarantees to improve financial inclusion and support the growth of SMEs in Cambodia. On 31 January 2024, CGCC launched as the First Cambodian Bond Guarantor after being accredited by the SERC) and rated khAAA, the highest rating by the local rating scale, by the Rating Agency of Cambodia on 19 December 2023. CGCC aims to provide guarantees on local corporate bond issuances on the CSX to support local companies raising funding and the development of the securities sector in Cambodia. The official website of CGCC: www.cgcc.com.kh and official Facebook page: https://www.facebook.com/officialcgcc.

 

 

Extension of Request for Proposal “Legal Counsel”

Posted on by Sorn Chhorvyvatey

CGCC is a state-owned enterprise, established under the technical and financial guidance of the Ministry of Economy and Finance (MEF) to provide credit guarantees based on international standards to improve financial inclusion and support the growth of SMEs in Cambodia. CGCC obtained the accreditation from the Securities and Exchange Regulator of Cambodia (“SERC”) to become the bond guarantor on 22 August 2023 (“Bond Guarantor” or “Guarantor”).

CGCC wishes to provide guarantee on bonds to be listed on the Cambodia Securities Exchange.

CGCC is seeking to engage a Cambodian legal counsel (“Legal Counsel”) to perform the services as described in the scope of work.

 

Signing of a $3 million Portfolio Guarantee Agreement for Women Entrepreneurs Between CGCC and Prince Bank

Posted on by Sorn Chhorvyvatey

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.

Signing of a $3 million Portfolio Guarantee Agreement for Women Entrepreneurs Between CGCC and Prince Bank
Signing of a $3 million Portfolio Guarantee Agreement for Women Entrepreneurs Between CGCC and Prince Bank

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.”

Signing of a $3 million Portfolio Guarantee Agreement for Women Entrepreneurs Between CGCC and Prince Bank
Signing of a $3 million Portfolio Guarantee Agreement for Women Entrepreneurs Between CGCC and Prince Bank

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.

Signing of a $3 million Portfolio Guarantee Agreement for Women Entrepreneurs Between CGCC and Prince Bank
Signing of a $3 million Portfolio Guarantee Agreement for Women Entrepreneurs Between CGCC and Prince Bank

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.

Maybank Cambodia, CGCC, BNI, CWEA ink MoU to Elevate SME Capacity and Capability Building

Posted on by Sorn Chhorvyvatey

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.”

Credit to: Khmer Times, Published on 11 June 2023

CGCC provides $120M credit guarantees to biz

Posted on by Sorn Chhorvyvatey

The Credit Guarantee Corporation of Cambodia (CGCC) provided credit guarantees of $120 million to businesses as of February 2023.

CGCC announced on Wednesday that it supported 1,367 businesses by providing credit guarantees for their loan applications as of the end of April 2023.

The report stated that a significant portion of the loan guarantees were used for working capital, investment, business expansion, and capital expenditures.

The total amount of outstanding guaranteed loans was $97.5 million, while the total amount of outstanding guaranteed obligations was $70.32 million.

It said that there are 1,249 small and medium-sized businesses (SMEs) and 118 large businesses in Cambodia.

About 550 were women-owned, 513 were secured loans, and 854 were unsecured loans.

CGCC said that various credit guarantee schemes played a vital role in strengthening entrepreneurship and improving financial inclusion in Cambodia, particularly during the Covid-19 pandemic, by facilitating the smooth distribution of loans.

It launched three guarantee schemes so far, including the Business Recovery Guarantee Scheme (BRGS) in March 2022; the Co-Financing Guarantee Scheme (CFGS) in September 2021; and the Women Entrepreneurs Guarantee Scheme in April 2022. The CGCC also extended the CFGS to the tourism sector.

The CGCC, which is under the Ministry of Economy and Finance, extended the BRGS from January 1, 2023, until the $200 million scheme is fully utilized.

These guarantee schemes are a way to help businesses get the money they need to grow and succeed. They are a valuable tool for supporting entrepreneurship and financial inclusion in the country.

The extension of BRGS will include updates to some of its features, such as the scheme period, the definition of MSMEs and large firms, and the maximum loan amount for each guarantee.

BRGS aims to help businesses, including MSMEs and large firms, obtain formal loans from participating financial institutions for working capital, investment, and business expansion.

CGCC, the first credit guarantee institution in the country, was established in August 2020, during the Covid-19 pandemic, to provide timely credit to support the rehabilitation and sustainability of local businesses.

The Cambodian Credit Guarantee Corporation has played an important role in serving the needs of small and medium enterprises in Cambodia, which are struggling during the epidemic of Covid-19 and the inflation crisis, and need credit from banks for their businesses.

It played a vital role in supporting SMEs who have been struggling during the Covid-19 pandemic and the inflation crisis, and they need credit from banks to keep their businesses afloat.

Credit to : Khmer Times Published on May 19, 2023

Courtesy visit by CGCC to NBC to discuss on the current situation of the credit market in Cambodia

Posted on by Sorn Chhorvyvatey

On Friday, 12 May 2023, at the National Bank of Cambodia (NBC), Credit Guarantee Corporation of Cambodia (CGCC), led by Mr. Wong Keet Loong, CEO of CGCC, paid a courtesy visit to H.E. Rath Sovannorak, Assistant Governor and Director General of Banking Supervision of NBC.

CGCC’s CEO, Mr. KL Wong was very grateful for the warm welcome of H.E Sovannorak and his team and was very pleased to update on CGCC’s latest progress in providing credit guarantee and CGCC’s strategy that requires close cooperation and support from NBC.

In response, H.E. Sovannorak praised the progress made by CGCC and expressed his support for CGCC’s mission to provide guarantees on loans disbursed by banks and microfinance institutions (MFIs) to businesses that lack collaterals, especially SMEs, the backbone of the economy,​ and to raise SMEs awareness on financial literacy.

The meeting also discussed the latest development in the banking sector, new NBC regulations as well as ways to enhance cooperation to improve financial inclusion and access to finance.

CGCC provides $105M credit guarantees to over 1K businesses

Posted on by Sorn Chhorvyvatey

The Credit Guarantee Corporation of Cambodia (CGCC) provided credit guarantees of $105 million as of February to businesses as their working capital for expansion.

In a factsheet issued on March 10, CGCC said that as of the end of February it has supported 1,155 businesses by providing credit guarantees for their loan applications, amounting to $104.9 million.

Large portions of the loan guarantee were used as working capital and other purposes of investment or business expansion, and capital expenditure, the report mentioned. As of January 2023, the outstanding guaranteed loan was $81.6 million while the outstanding guaranteed amount was $58.8 million.

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, CGCC said.

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 launched in April 2022, besides the extension of the CFGS to tourism. The CGCC of the Ministry of Economy and Finance has extended the BRGS from January 1, 2023, until the $200-million scheme is fully utilised.

Updating some scheme features, including the scheme period, the definition of the micro, small and medium enterprises (MSMEs) and large firms, and the maximum loan amount for each guarantee are on the extension of BRGS.

BRGS aims to support businesses, including MSMEs and firms, to enhance their access to formal loans from Participating Financial Institutions for working capital, investment, and business expansion.

Credit to: Khmer Times, Published on 20 March 2023
You might be to know more about: CGCC Credit Guarantees Climb to $45.5M

CGCC-guaranteed loans jump 13% year-to-date, top $104M

Posted on by Sorn Chhorvyvatey

Credit Guarantee Corporation of Cambodia Plc (CGCC) reportedly issued a total of 1,155 Letters of Guarantee (LG) for loans worth $104.9 million equivalent as of February 28 – up 13 per cent year-to-date – as part of its mission to improve financial inclusion among small- and medium-sized enterprises (SME) and promote the sustainability and expansion of businesses worst hit by Covid-19.

As of January 31, the outstanding guaranteed amount was $58.9 million out of the $81.6 million worth of loans covered by the LGs, as noted by the state-owned enterprise in a new report, remaining in the 70-80 per cent target range at just over 72 per cent.

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 in a bid to widen access to formal loans from participating financial institutions (PFI) for working capital, investment and business expansions.

Cambodia Microfinance Association (CMA) chairman Sok Voeun lauded the CGCC’s credit guarantee arrangements as important tools for SMEs to access formal unsecured loans to keep their businesses afloat and expand in light of Covid-19 bruises.

He told The Post on March 13 that commercial banks accounted for 80 per cent of loans covered by the 1,155 LGs, while microfinance institutions (MFI) “partnering with the PFI” constituted the rest.

On the other hand, banking institutions accounted for about 95 per cent of the $104.9 million loan value, he said.

“We’ve provided credit to most of the priority sectors, including services, agriculture and manufacturing,” he affirmed.

“We are happy to join the CGCC because risks are guaranteed. We’ve noted that since the beginning of the project, the rate of bad loans has been minimal because the businesses have the potential to stimulate economic activity, although they may not have collateral.

“Hence the credit guarantee scheme has been a big help for them to expand their businesses,” 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 differing categories of businesses.

The statement disclosed that loans, mostly unsecured, totalling about $89 million were guaranteed by the CGCC as of December 31 under the BRGS.

Cambodia Post Bank Plc, one of the PFIs, accounted for roughly $1 million of that, all of which went to SMEs, confirmed its CEO Toch Chaochek, telling The Post on March 13 that the plan is to increase that to $5-10 million in 2023.

To this end, the bank aims to shift its focus, from large SMEs with adequate collateral that are seeking to expand, to smaller ones without the assets needed for the secured loans to do the same, he revealed.

“The CGCC project is great for SMEs that do not have the collateral to obtain the loans – they have a shot at rehabilitating and expanding their businesses,” Chaochek said.

Credit to: Phnom Penh Post, Publication date 13 March 2023