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CGCC and Bridge Bank Signed on Credit Guarantee Agreement to Support Businesses in Access to Guaranteed Loans

Posted on by Sorn Chhorvyvatey

On 07 February 2024, Credit Guarantee Corporation of Cambodia (CGCC) and Bridge Bank officially announced the partnership in the signing ceremony on the Credit Guarantee Agreement to provide support to micro, small, and medium enterprises (MSMEs) and large enterprises, in easier access to bank’s loans with CGCC’s Guarantee for business development.

The partnership between CGCC, a state-owned enterprise, under the financial and technical guidance of the Ministry of Economy and Finance, and Bridge Bank, a commercial bank with a commitment to support the local MSMEs, will enable Bridge Bank to expand the opportunity to be confident in providing the loans to financially viable businesses but lack of collaterals, by using credit guarantees of CGCC.

CGCC and Bridge Bank

Mr. Wong Keet Loong, Chief Executive Officer of CGCC said: “This partnership with Bridge Bank opens up a new channel for us to reach out to support the Bank’s SMEs in getting loans when they lack collateral.  Our participating FIs will evaluate the eligibility of SMEs for guaranteed loans as they know the financial needs and repayment capability of the borrowers. Our guarantees are vital to ensure the continuous supply of credit into the market to support more economic activities.”

CGCC and Bridge Bank

Mr. Richard Liew, CEO of Bridge Bank said: “SMEs are one of the backbones of Cambodia’s economy, contributing significantly to the country’s GDP growth as well as providing employment opportunities to all Cambodians. However, some of these businesses often face challenges in accessing financing to support their growth. That is where this partnership between Bridge Bank and CGCC comes in. Through this MoU, we hope to provide MSMEs with easier access to loans by leveraging CGCC’s expertise in credit guarantee services. This will help to mitigate the risk of default and enable us to offer more competitive loan rates, thus increasing the affordability of credit for MSMEs.”

Through this agreement, Bridge Bank has now become one of the 28 Participating Financial Institutions (PFIs) of CGCC, committing to assisting business entities in line with the Government’s direction to support MSMEs. CGCC and Bridge Bank strongly believe that this partnership will be one of the key instrumental in addressing the financing gap faced by many MSMEs and will contribute to the growth and development of the country’s economy.

CGCC and Bridge Bank

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. Visit CGCC’s website for more information: www.cgcc.com.kh

 

About Bridge Bank

Bridge Bank provides a comprehensive range of banking products, such as loan services including home, automotive, personal, and business loans, as well as deposit services, payroll and remittance services.

Bridge Bank’s vision and mission are “to be your preferred financial partner of today and generations to come,” and “to provide financial services you can trust through our global service standards, making banking simple and secure.”

Please visit us for more details via www.bridgebank.com.kh​

CGCC Receives Premier khAAA Rating, Spearheading Bond Market Confidence in Cambodia

Posted on by Sorn Chhorvyvatey

Cambodia Investment Review

The Credit Guarantee Corporation of Cambodia (CGCC) has been recognized with a khAAA rating by the Rating Agency of Cambodia (RAC). This accreditation, recognized by the Securities and Exchange Regulator of Cambodia (SERC), signifies CGCC’s “Extremely strong capacity to meet financial commitments,” backed by the potential support of the Royal Government of Cambodia.

This rating marks a new moment for CGCC, recently accredited as Cambodia’s inaugural Bond guarantee institution by SERC. The move is strategically aimed at propelling the bond market’s growth, infusing it with newfound confidence. Following its accreditation, CGCC sought a credit rating from RAC and was subsequently honored with a khAAA rating and a stable outlook. This development is set to elevate the stature of corporate bonds under CGCC’s guarantee, instilling enhanced confidence among bond investors, encompassing financial institutions and insurance companies.

CGCC A Linchpin In Developing Cambodia’s Bond Market

H.E. Sou Socheat, the Director General of SERC, hailed this achievement, recognizing CGCC as a linchpin in Cambodia’s bond market. “CGCC’s rating underscores the firm’s robustness and ignites a culture of rating that fosters public trust. It also underscores the company’s dedication and proactive engagement in our bond market,” he remarked.

Read more: Credit Guarantee Corporation of Cambodia Partners with Cambodia Chamber of Commerce to Hit Aim of $100M in Loans for 2023

Mr. Wong Keet Loong, CGCC’s Chief Executive Officer, expressed his gratitude for this recognition. “Receiving the khAAA rating from RAC is a testament to our financial strength, enabling us to support larger SMEs in sourcing funds through bonds to expand their ventures. CGCC remains committed to bolstering economic development and fortifying trust and confidence among our partners,” he stated.

Under the guidance of the Ministry of Economy and Finance, CGCC has crafted a “Policy Framework on Bond Guarantee.” This framework received the highest endorsement from the Deputy Prime Minister, Minister of Economy and Finance, on May 17, 2023. In a subsequent move on August 22, 2023, SERC accredited CGCC as a bond issuance guarantor, a strategic initiative to bolster local firms in fundraising and nurturing the securities sector in Cambodia.

CGCC’s bond issuance guarantee service is poised to invigorate local company issuances, magnetize investors to corporate bonds, enhance the liquidity of the Khmer Riel, and uplift corporate bonds’ credit ratings. CGCC stands as Cambodia’s sole credit guarantee corporation, established under the auspices of Hun Sen and operating with the technical and financial support of the Ministry of Economy and Finance. Its core mission is to extend credit guarantees, fostering financial inclusion and catalyzing the growth of SMEs across Cambodia.

KhAAA – A Cambodian-Specific Credit Rating

The authorization of RAC by SERC in 2022, a collaboration between the Royal Group and 3E:Fii Capital, marked a significant stride in developing Cambodia’s capital markets. Credit ratings, symbolized by codes like AAA, BB, and CC, reflect the creditworthiness of corporate or government bonds, with higher ratings typically attracting lower interest rates due to perceived lower risks.

With the operationalization of RAC, Cambodian entities can now obtain a nation-specific credit rating, such as ‘khAAA’ or ‘khBB,’ essential for all listings on Cambodia’s Securities Exchange. This move dovetails with the regulator’s plan to introduce a dual ‘Khmer’ and ‘Global’ rating system, positioning Cambodia’s sovereign rating at AAA within the local category.

As Cambodia steps into this new era of financial sophistication, CGCC’s khAAA rating not only represents a landmark achievement but also heralds a new chapter of confidence and growth for the nation’s burgeoning bond market.

Credit to: Cambodia Investment Review, Published on 23 January 2024

State-run CGCC graded khAAA, making way for bond market expansion

Posted on by Sorn Chhorvyvatey

The state-owned Credit Guarantee Corporation of Cambodia (CGCC) has been rated khAAA by the Rating Agency of Cambodia (RAC), after its accreditation by the Securities and Exchange Regulator of Cambodia (SERC), making it the first debt securities guarantee institution in the country, enabling it to support local companies in issuing bonds.

The initiative aims to increase the liquidity of the Khmer riel through the issuance of financial instruments and enhance the credit rating of corporate bonds.

The move is part of a broader strategy to stimulate the sector’s development by fostering greater market confidence.

Wong Keet Loong, CEO of CGCC, said the khAAA rating enables them to assist small and medium-sized enterprises (SMEs) in need of additional funds through debt securities issuance in the capital market.

“The rating demonstrates the CGCC’s financial capacity to assist larger SMEs capable of issuing bonds to secure funding for their business expansion. CGCC remains instrumental in fostering economic development and in strengthening the trust and confidence of our partners,” he said.

SERC director-general Sou Socheat confirmed that the corporation’s rating allows it to aid other companies in issuing bonds on the Cambodia Securities Exchange (CSX).

“CGCC is a guarantor in the Cambodian bond market and its rating indicates the company’s soundness. Moreover, CGCC’s rating starts the culture of rating in the market, building public confidence and showcasing the company’s commitment and willingness to actively engage in our bond market,” he explained.

The corporation formulated a policy framework on bond guarantee and received endorsement from the Ministry of Economy and Finance on May 17, 2023.

On August 22, SERC accredited CGCC as a bond issuance guarantor, supporting local companies and aiding the growth of the Kingdom’s securities sector.

Established under sub-decree No 140/ANKR/BK on September 1, 2020, the corporation launched its $200 million Business Recovery Guarantee Scheme (BRGS) on March 29, 2021 in a bid to broaden access to formal loans from participating financial institutions (PFIs) for working capital, investment and business expansion purposes, according to CGCC.

As of December 22, the corporation’s outstanding loans amounted to $113.96 million, with a non-performing loan (NPL) ratio of 5.41. Total claim payouts stood at $123,336.

The corporation has supported 1,731 micro, small and medium enterprises (MSMEs) along with 149 larger firms, as per CGCC.

Credit to: The Phnom Penh Post, Published on 22 January 2024

CGCC rated khAAA by Rating Agency of Cambodia

Posted on by Sorn Chhorvyvatey

Credit Guarantee Corporation of Cambodia (CGCC) has been rated khAAA by the Rating Agency of Cambodia (RAC), a credit rating agency accredited by the Securities and Exchange Regulator of Cambodia.

This rating indicates that CGCC has an “extremely strong capacity to meet financial commitment” with the likelihood of support from the Royal Government of Cambodia.

CGCC was recently accredited as the first Bond guarantee institution in Cambodia by the Securities and Exchange Regulator of Cambodia (SERC) to help boost the bond market development in Cambodia by building more market confidence.

After obtaining the accreditation from SERC, CGCC has applied for a credit rating from RAC. As a result, CGCC was rated khAAA with stable outlook. This will enhance the rating of the corporate bonds guaranteed by CGCC and bring more confidence for bond investors, including financial institutions and insurance companies.

Sou Socheat, delegate of the Royal Government in charge as Director General of the SERC said, “CGCC is a guarantor in Cambodia bond market and its rating indicates the soundness of the company. In addition, the rating of CGCC demonstrates and commences the culture of rating to build more confidence from public and it also shows the commitment and the willingness of the company to actively participate in our bond market.”

Wong Keet Loong, Chief Executive Officer of CGCC, said, “We are honoured to receive the khAAA rating from RAC. This rating reflects the financial capability of the company to support larger SMEs who can issue bonds to source funding to expand their business. CGCC continues to play a vital role in supporting economic development and further enhancing the trust and confidence of our partner.”

Under the policy direction from the Ministry of Economy and Finance, the CGCC has developed a “Policy Framework on Bond Guarantee” and has received the highest approval from Deputy Prime Minister, Minister of Economy and Finance, on this policy framework on May 17, 2023.

On 22 August 2023, the Securities and Exchange Regulator of Cambodia (SERC) issued an accreditation letter to CGCC as a guarantor for bond issuance to support local companies raising funds and the development of the securities sector in Cambodia.

The guarantee on bond issuance service of CGCC can provide further support to encourage bond issuances by local companies, attract investors to invest in corporate bonds, increase the liquidity of Khmer Riel from the bond issuance and improve the credit rating of corporate bonds.

CGCC is the only credit guarantee corporation in Cambodia, established by the decision of former Prime Minister 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.

Credit to: Khmer Times, Published on 22 January 2024

CGCC Issued Guarantee Letters for Loans Worth over $159M

Posted on by Sorn Chhorvyvatey

Serving as a key pillar of support for the businesses in distress across the Kingdom, the Credit Guarantee Corporation of Cambodia (CGCC) issued 1,880 letters of guarantee for loans worth $159.69 million until November 30 last year, according to the organisation’s latest factsheet.

The CGCC is the preferred credit guarantee institution in Cambodia set up to improve financial inclusion and develop the growth of SMEs. Established in November 2020 with a state budget of $200 million, its mission has been to provide credit guarantees to lenders on loans made to businesses based on international standards alongside sharing the risk with lenders and improving financial inclusion.

Through its various initiatives and programmes, the organisation has extended its support to over 1,700 micro, small and medium enterprises (MSMEs) and more than 150 larger firms, and contributed towards fostering employment and income opportunities. Studies reveal CGCC initiatives have directly contributed towards financial inclusion as well as poverty reduction.

The CGCC scheme involves 27 participating financial institutions (PFIs), which extend credit as working capital investment and business expansion to SMEs.

As per the CGCC factsheet, the outstanding guaranteed loan stood at $113.96 million while the outstanding guaranteed amount was $82.12 million. The Non-Performing Loan (NPL) ratio of the outstanding guaranteed amount remained at 5.41 percent and the claim payout stood at $123,336.

The organisation’s spectrum of activities was widened when the Securities and Exchange Regulator of Cambodia (SERC) under the Non-Bank Financial Services Authority of the Ministry of Economy and Finance accredited the CGCC as the country’s first guarantor for bond issuance to support local companies in raising funds last October.

The SERC issued a formal letter to accredit CGCC as Cambodia’s first bond issuance guarantor on August 22, 2023, which according to experts, will play an important role in the development of the securities sector in the country.

The CGCC has developed a policy framework on bond guarantee that was approved by the Deputy Prime Minister and Minister of Economy and Finance 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,” a SERC statement said.

The organisation has been receiving technical support from the Asian Development Bank (ADB), World Bank, and UN Capital Development Fund (UNCDF) ever since it launched the first guarantee scheme on 29 March 2021.

Te Taing Por, President of the Federation of Association for Small and Medium Enterprises of Cambodia (FASMEC), earlier told Khmer Times that the CGCC guarantee ensures easy credit for SMEs and a bigger market for their products.

“Credit guarantee from the Credit Guarantee Corporation of Cambodia is an opportunity for small and medium-sized enterprises, members of FASMEC, who are facing a lack of collateral to access financing to expand their business,” Taing Por had said.

The CGCC has also been providing support to SMEs on capacity building, consulting, technical and information backup under the credit guarantee framework.

Credit to: Khmer Times, Published on 01 January 2024

A cooperative business linkage event on “Strengthening and Extending the Agricultural Products through Contract Farming Implementation”

Posted on by Sorn Chhorvyvatey

On December 28, 2023, Ms. Pin Manika, Manager of Marketing and Business Development, represented Credit Guarantee Corporation of Cambodia (CGCC), was invited to attend a cooperative business linkage event on “Strengthening and Extending the Agricultural Products through Contract Farming Implementation,” organized by Cambodian Agricultural Cooperative Alliance (CACA)” presided over by representative of the Ministry of Agriculture, Forestry, and Fisheries and the Cambodian Agricultural Cooperative Alliance. The agricultural community leaders, rural community representatives, representatives from state institutions, development counterparties, and private institutions, with approximately 230 attendees, attended.

The forum is organized to create collective dialogues with private sector institutions, manufacturers (Agricultural Community), development partners and relevant organizations to find out progress, challenges, and solutions, especially continuity together efforts in partnership between governments, agricultural communities, private sectors, development partners and institutions involved to support the strengthening and expanding agricultural products market more efficiently and energetically.

On that occasion, Ms. Pin Manika also presented the CGCC’s credit guarantee schemes and the benefits of guaranteed loans through CGCC’s participating financial institutions in response to the lack of collateral when applying for a loan to expand and rehabilitate their businesses, especially to the business owners who are in the agriculture sector.

$150M in Loans Guaranteed for SMEs by CGCC

Posted on by Sorn Chhorvyvatey

As of November 30, the state-owned Credit Guarantee Corporation of Cambodia Plc (CGCC) has issued a total of 1,880 Letters of Guarantee (LG) for loans worth $159.69 million. The guarantees were in support of small- and medium-sized enterprises (SMEs) affected by the Covid-19 pandemic.

According to figures released on December 22, the total of outstanding loans equal $113.96 million, with a non-performing loan (NPL) ratio of 5.41. Total claim payouts came to $123,336. The businesses supported included 1,731 micro, small and medium enterprises (MSMEs), and 149 larger firms.

Mey Vann, secretary of state at the Ministry of Economy and Finance, recently explained that SMEs have played an important role in supporting Cambodia’s socio-economic development. They contributed to the reduction of poverty by 50.2 per cent in 2003 to just 17.8 per cent in 2020, by increasing employment and income for Cambodians.

He said the CGCC was established to share risks with financial institutions, in order to increase the accessibility of loans to businesses, especially SMEs.

“The government considers that the use of the state budget to support financing through the credit guarantee mechanism has the first major advantage of a ‘Leverage Effect’. By using the capital of the CGCC to secure rotating loans, the capital is used only when a secured loan is lost. The state budget of $200 million provided by the CGCC supports the issuance of loans with a far greater value,” he said.

“Second, it serves as a ‘Countercyclical Crisis Tool’ by maintaining market confidence, especially during a crisis, to balance economic activity,” he added.

Toch Chaochek, CEO of Cambodia Post Bank Plc (CPBank), a CGCC partner, explained that SMEs which are correctly registered and seek loans with the assistance of the CGCC are less risky creditors than their counterparts that do neither.

The National Bank of Cambodia expressed support for lending to smaller businesses, noting that the benchmark risk weight was reduced to 75 per cent for properly registered SMEs that could produce appropriate financial statements.

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.

In early January, the finance ministry announced the ongoing BRGS to MSMEs, as well as large enterprises. The project will continue until the initial capital of $200 million is gone.

Credit to: The Phnom Penh Post, Published on 25 December 2023

Meeting Between CGCC ADB, and GGGI exploring the collaboration on Cambodian Green Sustainable Financing

Posted on by Sorn Chhorvyvatey

On 06 December 2023, CGCC, led by Mr. Wong Keet Loong, CEO of CGCC, met with the Asian Development Bank (ADB), and the Global Green Growth Institute (GGGI) to discuss on GGGI’s Switch Garment Project to promote sustainable energy practices in the Garment Sector in Cambodia.

The meeting also aimed to explore collaboration opportunities between CGCC, ADB, and GGGI to implement the Sustainable Green Financing Facility (SGFF), a blended financing facility comprising of credit guarantee, and technical assistance elements, to support sustainable development goal (SDG).

The Business Owner Who Received a Loan Guaranteed by CGCC

Posted on by Sorn Chhorvyvatey

Agriculture is one of the key sectors in supporting Cambodia’s economic growth. Seeing the potential to promote Cambodian products and support Cambodian farmers, I decided to start a Cambodia Safety Vegetable Union of Agricultural Cooperative in 2021.

When starting this business, my main challenge was the lack of human resources to prepare documents and handle administrative work since most of the community union members were farmers. Another major challenge was the lack of working capital to expand the business and product exports. The solution for me was a loan from a financial institution.

At first, because my collateral was not enough for the loan, I could not obtain the necessary loans to support my business. However, later with a guarantee from CGCC, I was able to receive a sufficient business loan from Chamroeun Microfinance Institution. I used the guaranteed loan as a working capital, which allowed me to grow my Cambodia Safety Vegetable business to serve my customers and distributors in many provinces and cities on time. I also gained the trust of various development partners on my business.

Obtaining a guaranteed loan from CGCC depends on the potential of my business, namely the possibility of growth, building a good credit history, as well as completing the required documents that can confirm the need to use a loan for my business. Other business owners who need capital but lack collateral can also seek credit guarantees from CGCC through CGCC partner banks or microfinance institutions.

Read more: Meet the Business Owner Who Received a Loan Guaranteed by CGCC