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MEF calling for loans to SMEs with no collateral

Posted on August 23, 2022June 7, 2023 by Sorn Chhorvyvatey

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

Cambodia’s SMEs Battle String of Challenges

Posted on August 19, 2022June 7, 2023 by Sorn Chhorvyvatey

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”

Credit guarantee helped firms to survive pandemic

Posted on August 19, 2022June 7, 2023 by Sorn Chhorvyvatey

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.

Credit guarantee helped firms to survive pandemic

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.

You may also be interested in Press Release Conference on “Credit Guarantee Schemes’ Potential to Strengthen SME’s Financial Inclusion in Cambodia”

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

Press Release Conference on “Credit Guarantee Schemes’ Potential to Strengthen SME’s Financial Inclusion in Cambodia”

Posted on August 18, 2022June 7, 2023 by Sorn Chhorvyvatey

Phnom Penh, 18 August 2022: Ministry of Economy and Finance (MEF) and Credit Guarantee Corporation of Cambodia (CGCC) co-organized a “Conference on Credit Guarantee Schemes’ Potential to Strengthen SME’s Financial Inclusion in Cambodia” presided over by H.E. Ros Seilava, Secretary of State, Ministry of Economy and Finance, and Chairman of CGCC, and H.E. Dr. Chea Serey, Assistant Governor and Director General of Central Banking, National Bank of Cambodia, with the participation of representatives from the Government, development partners, financial institutions, business associations, and business owners, especially SMEs, of more than 100 participants. The Conference aims to discuss using credit guarantees to strengthen SME’s financial inclusion, raise awareness of credit guarantees, and share experiences and lessons learned from guaranteed loan disbursements.

Press Release Conference on “Credit Guarantee Schemes’ Potential to Strengthen SME’s Financial Inclusion in Cambodia”

H.E. Ros Seilava, Secretary of State, highly appreciated today’s Conference, which is an important forum to raise awareness of the credit guarantees through the discussion and experience sharing among related stakeholders. H.E. Secretary of State said, “The Government launched the public credit guarantee scheme by establishing CGCC more than one year ago. As of July 2022, CGCC has supported the disbursement of about $57 million new loans with credit guarantees to businesses that lack collateral through the Participating Financial Institutions (PFIs). Even though this $57 million is a small amount, it is the starting of new lending practices that do not rely on collateral in Cambodia’s credit market.”

H.E. Dr. Chea Serey mentioned in her keynote address the contribution of the National Bank of Cambodia (NBC) as the regulator who plays a critical role in supervising the banking sector. H.E. Dr. Chea Serey said, “Understanding the importance of SMEs in the economy and their challenges in access to finance to the banking and financial institutions, the Government decided to establish the credit guarantees to support SMEs that lack collateral. CGCC’s credit guarantee is a good policy tool; however, SMEs should not remain laissez-faire. SMEs shall continue to improve their capacity, i.e., by leveraging technology.”

Mr. Wong Keet Loong, Chief Executive Officer of CGCC, expressed his gratitude to the Royal Government of Cambodia, who, through the Ministry of Economy and Finance, has always provided strategic guidance to CGCC to expand the credit guarantees to support the Government’s financing policy. Mr. Wong said, “As of the start of Q3 2022, CGCC has expanded its guaranteed coverages to all over the country, even in the remote provinces, thanks to the vast branch networks of CGCC’s PFIs across the country. However, more still needs to be done to improve financial inclusion for different groups of businesses in other parts of the country.”

During the conference, the representatives from CGCC’s PFIs, Canadia Bank and Sathapana Bank, shared common views on the importance of credit guarantees in supporting banks to disburse more loans to businesses, especially businesses that lack collateral. The banks’ representatives also shared their lending strategies with credit guarantees.

Two SME borrowers were invited to share their practical experiences in access to guaranteed loans with CGCC’s PFIs. Credit guarantees helped both business owners who did not have collateral to get loans for their business’s operations.

Moreover, representatives from relevant stakeholders, including the Government (a representative from the MEF), the regulator (a representative from NBC), the lender (a representative from Maybank Cambodia), the business owners (a representative from the Young Entrepreneurs Associations of Cambodia) and the credit guarantee institution (a representative from CGCC) joined the panel discussion on “Roles of Credit Guarantee in Banking and Business Sector Development.” The panelists discussed the challenges, solutions, and recommendations to improve the effectiveness of using credit guarantees to support business sector development, especially the SMEs, which are the backbone of the economy.

CGCC provides credit guarantees on business loans disbursed by banks and microfinance institutions to support potential businesses that lack collateral. CGCC serves the Government’s policy to improve financial inclusion and develop SMEs in Cambodia. For more information, please contact CGCC via 023 722 123 or 016 242 033 or visit CGCC at www.cgcc.com.kh. Thank you.

Phnom Penh, Thursday, 18 August 2022

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CBC, CGCC team up on SME, women’s access to finance

Posted on August 14, 2022June 7, 2023 by Sorn Chhorvyvatey

Credit to: The Phnom Penh Post, 14 August 2022

State-owned enterprise Credit Guarantee Corporation of Cambodia (CGCC) on August 11 announced that it had entered into a partnership with independent financial information provider Credit Bureau (Cambodia) Co Ltd (CBC) to improve access to financing for women and smaller businesses.

The two institutions signed a memorandum of understanding (MoU) to that effect on the same day, to enhance financial inclusion for women and small- and medium-sized enterprises (SME), promote the CGCC’s credit guarantee support schemes, and develop data analytics capabilities among formal lenders to improve the decision-making process in credit granting, the state-owned firm noted in a statement.

“The cooperation between CBC and CGCC will expand access to credit, by providing more transparent loan assessment to women and SMEs,” it said.

Under the MoU, CBC will provide credit history information “bridging the information asymmetry between borrower and lenders, thus, reducing transaction costs of lending and promoting access to finance.

“CGCC [will provide] credit guarantees on loans disbursed by participating financial institutions [PFI] to support viable businesses and individuals that lack collateral when seeking access to finance. Especially, in the context of the economic slowdown from the [Covid-19] pandemic, support from CGCC has been instrumental in driving economic growth, fuelling employment and stabilising the economy,” it added.

CBC CEO Oeur Sothearoath said in the statement: “This partnership marks a milestone in enhancing financial inclusion to women and SMEs owners as well as assuring a fair, reliable and data-driven approach in enabling access to finance for in the country.

“This collaboration between CBC and CGCC shall strengthen our financial infrastructure and streamline the much needed support for SMEs,” he said.

Speaking in the statement, CGCC CEO Wong Keet Loong pointed out that “with this MOU, CGCC will be able to build the credit profile of guaranteed loans by using CBC’s K-score as a reference for credit rating of our guaranteed borrowers”.

In a previous interview with The Post, Sothearoath explained that the K-Score, or Khmer Score, is a measure of “applicants’ potential credit risk at the point of application and predicts the likelihood of payment default in the next 12 months”.

Wong added that “when PFIs report the conduct of guaranteed loans in their monthly reporting to CBC, this data would be useful to capture the profile of Cambodian SME borrowers with guaranteed loans. This would further facilitate access to financing for SMEs”.

The statement said the collaboration would enable financial institutions “to use digitalization, advanced reporting, and data analytics tools from CBC to conduct an accurate risk assessment of borrowers and monitor their performance”.

“Through this collaboration, the two institutions also commit to cooperate in financial education and awareness activities to promote financial inclusion in the country,” it said.

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CGCC and Credit Bureau partnership to promote SME and women’s access to finance

Posted on August 11, 2022June 7, 2023 by Sorn Chhorvyvatey

Phnom Penh, Cambodia, 11 August 2022 – Credit Guarantee Corporation of Cambodia Plc. (CGCC) and Credit Bureau (Cambodia) Co., Ltd. (CBC) signed a Memorandum of Understanding to strengthen financial inclusion for women and SMEs through the promotion of a credit guarantee support scheme and the adoption of data analytics in credit decision-making by financial institutions across Cambodia. The cooperation between CBC and CGCC will expand access to credit, by providing more transparent loan assessment to women and SMEs.

As the only credit reporting service provider in the country, CBC provides credit history information bridging the information asymmetry between borrowers and lenders, thus, reducing transaction costs of lending and promoting access to finance. Over the years, CBC’s credit reporting services and a portfolio of data analytics solutions have eased barriers to credit for many Cambodians and reduced industry-wide credit risk management. CBC’s role as a key financial infrastructure is significant to maintaining financial sector stability for the country.

CGCC and Credit Bureau partnership to promote SME and women’s access to finance

CGCC provides credit guarantees on loans disbursed by participating financial institutions to support viable businesses and individuals that lack collateral when seeking access to finance. Especially, in the context of the economic slowdown from the pandemic, support from CGCC has been instrumental in driving economic growth, fueling employment, and stabilizing the economy.

Mr. Oeur Sothearoath, Chief Executive Officer of CBC said, “This partnership marks a milestone in enhancing financial inclusion to women and SME owners as well as assuring a fair, reliable and data-driven approach in enabling access to finance for in the country. This collaboration between CBC and CGCC shall strengthen our financial infrastructure and streamline the much-needed support for SMEs.”

Credit Guarantee Corporation of Cambodia Plc. and Credit Bureau (Cambodia) Co., Ltd. ink partnership to promote SME and women’s access to finance — CGCC and Credit Bureau partnership to promote SME and women’s access to finance

Mr. Wong Keet Loong, Chief Executive Officer of CGCC said “With this MOU, CGCC will be able to build the credit profile of guaranteed loans by using CBC’s K-score as a reference for credit rating of our guaranteed borrowers. When PFIs report the conduct of guaranteed loans in their monthly reporting to CBC, this data would be useful to capture the profile of Cambodian SME borrowers with guaranteed loans. This would further facilitate access to financing for SMEs.”

While it is mandatory for every lender to check the credit report of borrowers from CBC during loan assessment, CGCC and CBC will collaborate to enable the financial institutions to use digitalization, advanced reporting, and data analytics tools from CBC to conduct an accurate risk assessment of borrowers and monitor their performance.

Through this collaboration, the two institutions also commit to cooperating in financial education and awareness activities to promote financial inclusion in the country.

About CBC

Since 2012, CBC is the leading provider of financial information, analytical solutions, and credit reporting services to financial institutions and consumers in the Kingdom of Cambodia. CBC assists customers in managing the risks and rewards of commercial and financial decisions through a range of solutions, including Consumer Credit Reports, Commercial Credit Reports, K-Score, Data Analytical Reports, Portfolio Monitoring Services, Portfolio Review Services, and Customized Solutions. CBC serves a member base of 180 financial institutions with credit histories of more than 7 million borrowers.

About CGCC

CGCC is a state-owned enterprise operated under the technical and financial guidance of the Ministry of Economy and Finance (MEF), and officially incorporated in November 2020. CGCC’s 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. As of the end of July, CGCC has supported 591 businesses by providing credit guarantees for their loan applications, amounting to USD 57.4 million equivalent. CGCC has provided the most guarantee to SMEs, which is accounted for 96% of the total businesses receiving the credit guarantee from CGCC.

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CGCC Guarantees $50.5 Million Credit

Posted on August 1, 2022June 8, 2023 by Sorn Chhorvyvatey

Credit to Khmer Times: Published on 27 July 2022

Credit Guarantee Corporation of Cambodia (CGCC) has issued 515 letters of guarantee for loans worth $50.5 million by the end of June this year since the launch of the credit guarantee scheme in March 2021, according to the CGCC quarterly newsletter.

The report showed that the loans were guaranteed under the business recovery guarantee scheme, co-financing guarantee scheme, and women entrepreneur guarantee scheme. The state-owned firm guaranteed $28.9 million in loans in the first half of this year — an increase of over 130 percent compared to 2021.

Wong Keet Loong, CEO of CGCC, said that the scheme for the second quarter of this year showed growth in both guaranteed value and the number of letters of guarantee issued compared to the first quarter — increasing to $18.4 million from $10.3 million and to 189 letters of guarantee from 128.

“We are confident that the momentum will continue into the second half of the year. We will continue to support participating financial institutions that can reach out to more entrepreneurs,” said Wong.

In May of 2022 alone, $7.4 million in loans were guaranteed for 71 businesses, according to the report, adding that this is the highest value of guarantees since April 2021. Of this, 412 letters of guarantee were for fixed-term loans.

According to the report, about 400 entrepreneurs used the loans as working capital and about 96 percent or 498 businesses availed an average of $100,000 each for the purpose.

About 75 percent, or 386 entrepreneurs, applied for the CGCC service without collaterals, the report pointed out, noting that the number of women entrepreneurs increased to 165 — availing 32 percent of the total loan — in June from 138 in May this year.

Entrepreneurs in Phnom Penh received 156 letters of guarantee, accounting for about 30 percent, followed by those in Battambang with 56, Kampong Cham with 34, and Kampong Thom and Siem Reap, with 30 each.

“The coverage of credit guarantee grew nationwide through the networks and branches of the participating financial institutions. However, some remote provinces still need more promotion to raise awareness of the scheme,” the report said.

In the April-June period this year, Canadia Bank, Sathapana Bank, and LOLC Microfinance Institution applied for most loan guarantees under the scheme which is operated with the technical and financial guidance of the Ministry of Economy and Finance.

Raymond Sia, CEO of Canadia Bank, said the commercial bank has provided nearly $20 million to over 200 customers under the scheme.

Canadia Bank has plans to provide more CGCC-guaranteed loans to both existing and new customers having good credit records and a clear plan of loan usage.

“We believe that the credit guarantee schemes can help potential business owners who are in need of loans but do not have sufficient collaterals, especially for the recovery and expansion of businesses after the pandemic,” he said.

Wong had discussed issues such as financial inclusion, financial literacy, and risk weightage for guaranteed loans with the Director General of National Bank of Cambodia, Chea Serey, last month during a meeting attended by officials from both institutions.

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CGCC’s Co-Financing Guarantee Scheme to help Tourism Sector

Posted on July 21, 2022June 9, 2023 by Sorn Chhorvyvatey

Credit to Khmer Times: Published on 20 July 2022

The scheme is specifically targeted at tourism-related businesses. It provides a higher guarantee cover of 80 percent of the loan amount with a nominal guarantee fee of one percent per annum, says Wong Keet Loong, CEO of CGCC.

Business owners in the tourism sector who lack collateral can apply for a loan with a credit guarantee from a financial institution that is a partner of the Credit Guarantee Corporation of Cambodia (CGCC), according to the Ministry of Tourism.

According to an announcement from the Ministry of Tourism, CGCC launched the Co-Financing Guarantee Scheme for Tourism on 12 July to support the rehabilitation and growth of the country’s tourism sector.

The scheme is a credit guarantee, providing collateral for 80 percent of the loan from banks and financial institutions.

In case the tourism business owner lacks collateral to secure a loan in the co-financing project, they can apply with a loan guarantee from a financial institution that is a partner of CGCC.

The CGCC launched the scheme after receiving approval from the Ministry of Economy and Finance.

Wong Keet Loong, CEO of CGCC, told Khmer Times that the scheme is specifically targeted at tourism-related businesses. “It provides a higher guarantee cover of 80 percent of the loan amount with a nominal guarantee fee of one percent per annum. The scheme is mainly for loans disbursed under the Tourism Recovery Co-Financing Scheme (TRCS) of the SME Bank of Cambodia,” he said.

Loong explained that under CGCC’s current scheme, the Business Recovery Guarantee Scheme (BRGS), tourism is classified as a priority sector. It has guaranteed 15 tourism-related businesses with a loan amount of $1.78 million.

“The scheme was recently launched to complement the SME Bank’s Tourism Recovery Co-Financing Scheme (TRCS). TRCS provides low borrowing costs whilst the CFGS-TR provides credit guarantees as collateral for the loans. Business owners can obtain loans at low-interest rates without providing physical collateral,” he pointed out.

CGCC’s existing schemes also cover the tourism sector should PFI use its own source of funding and require higher loan amounts to be guaranteed. He said most businesses in this sector that have been impacted by the pandemic have either scaled down or shut down temporarily.

“To recover their business, they would need funding for renovation or refurbishments. When requesting loans from banks, they are required to pledge their collaterals. The requirements for collateral have become more stringent as FIs are more risk-averse toward the sector,” Loong said.

CGCC guarantees 80 percent of the loan and it shares the risk with the financial institution, enabling the borrower to borrow without having to pledge additional collateral. “Furthermore, the guarantee will give added confidence to the financial institution to lend to this sector,” he added.

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Co-Financing Guarantee Scheme to support Tourism Recovery

Posted on July 14, 2022June 9, 2023 by Sorn Chhorvyvatey

To support the government’s policy on tourism recovery and growth of the sector, Credit Guarantee Corporation of Cambodia (CGCC) launched the Co-Financing Guarantee Scheme for Tourism (CFGS-TR) after approval by the Ministry of Economy and Finance.

CFGS-TR is specifically designed to provide credit guarantees on co-financing loans disbursed by CGCC’s Participating Financial Institutions (PFIs) under the Tourism Recovery Co-Financing Scheme (TRCS) of the SME Bank of Cambodia.

It is a joint effort by the two state-owned enterprises to improve access to finance for SMEs in the tourism sector. While TRCS aims to lower SMEs’ cost of borrowing, CFGS-TR is a guarantee scheme that will act as collateral/security for 80 percent of the loan amount; thus, reducing the physical collateral required from the borrowers.

CFGS-TR will support new loan disbursements in the banking sector to SMEs. Meanwhile, PFIs will be able to offer higher loans and the risk exposure will be shared with CGCC up to 80 percent.

According to a press release the Co-Financing Guarantee scheme – Tourism is a sub-credit guarantee scheme under the Co-Financing Guarantee scheme offered by the CGCC to participating financial institutions on the loans lent out under the Tourism Recovery Co-Financing schemes of SME Bank of Cambodia.

Hong Vannak, an economic researcher at the Royal Academy of Cambodia, said that the provision and receipt of a loan with legal guarantees have played an important role in the growth of the economy, particularly, in a crisis caused by Covid-19.

When the financial sector is stable, there is a lot of investment and job creation. On the other hand, when small and medium enterprises have sufficient capital, it also helps to increase production processes and reduce imports and increase exports, he added.

He further said that providing credit guarantees has helped both lenders and borrowers to have confidence in each other because before daring to guarantee, the CGCC always has conditions and studies the business first.

(Article from Khmer Times: Publication on July 14, 2022)

Check here to Understand more about the service: CFGS-TR

PRESS RELEASE CGCC Launches Co-Financing Guarantee Scheme for Tourism to support the Recovery and Growth of Tourism Sector

Posted on July 12, 2022June 9, 2023 by Sorn Chhorvyvatey

To support the Government’s policy on recovery and growth of the Tourism Sector, the Credit Guarantee Corporation of Cambodia (CGCC) is pleased to launch the “Co-Financing Guarantee Scheme for Tourism (CFGS-TR)” after the highest approval from H.E. Akka Pundit Sapheacha Deputy Prime Minister, Minister of Economy and Finance.

CFGS-TR of CGCC and TRCS of SME Bank are the joint efforts of the two state-owned enterprises to improve access to finance for SMEs in the Tourism Sector. While TRCS aims to lower SMEs’ cost of borrowing, CFGS-TR is a guarantee scheme that will act as collateral/security for 80% of the loan amount; thus, reducing the physical collateral required from the borrowers. CFGS-TR will support new loan disbursements in the banking sector to SMEs. Meanwhile, PFIs will be able to offer higher loan amounts, and the risk exposure will be shared with CGCC up to 80%.

For more information, please contact CGCC via 023 722 123, or visit CGCC’s official website www.cgcc.com.kh.

Phnom Penh, 12 July 2022

Credit Guarantee Corporation of Cambodia

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