Credit Guarantee Archives - Page 8 of 21

NBC sets new capital, risk rules for banks, financial institutions

Posted on July 4, 2023July 11, 2023 by Sorn Chhorvyvatey

The National Bank of Cambodia (NBC) yesterday released two proclamations that set new requirements for depositing-taking banks and financial institutions to strengthen the quality of their capital to increase the effectiveness of preventing main banking risks and assess credit risks at lower rates to boost the economic growth by supporting the private sector in the economy.

The two proclamations launched include regulatory capital of deposit-taking banks and financial institutions and a proclamation on credit risks for capital adequacy ratio of deposit-taking banks and financial institutions, which have been prepared in accordance with international standards.

The two documents were issued as an improved part of the capital adequacy frameworks for depositing-taking banks and financial institutions in the context, development and vision of the banking and financial systems, laws and regulations that are applicable in Cambodia, which would contribute to increasing the public confidence on the country’s banking systems.

A technical official at NBC told Khmer Times yesterday that the first proclamation sets restructuring of components and methodologies of calculation of regulatory capitals of deposit-taking banks and financial institutions to enhance both quantity and quality of the capital to cover losses in case of going-concern and settlement of debts in case of gone-concern.

“The first proclamation sets the requirements for the acknowledgement of financial instruments in different classes that would help the target banks and financial institutions strengthen their capital and resilience against risks such as credit risks, operations risks and market risks, which would be able to protect depositors, debtors, investors and institutions themselves,” the official said.

The requirements would enable the financial instruments of deposit-taking banks and financial institutions in Cambodia to be acknowledged in tier 1 capital that would enable them to cover losses in the going-concern scenario or during operations, or tier 2 capital that enables them to cover losses on the gone-concern scenario or in process of operations closures.

Article 8 stipulates the components of the regulatory capital, saying that the total regulatory capital is composed of the tier 1 capital that includes common equity tier 1 capital, which is considered the best quality capital as it would enable those banks and financial institutions to cover immediate losses on the going-concern scenario with six sub-components including retained earnings, audited accumulated other comprehensive income and disclosed reserves.

The regulatory capital is composed of tier 2 capital which is its second component, according to the proclamation. “The requirements to acknowledge the regulatory capitals are set in the proclamation, but each or some requirements are applicable dependently on sub-components. Let’s say this requirement is for these sub-components. So, it is difficult to explain,” added the official.

However, the official pointed out that deposit-taking banks and financial institutions are required to fulfill 14 requirements for their regulatory capital to be acknowledged as the common equity tier 1 capital including capital instruments that are the last settlement in case of liquidation of the institution. “It is too technical to explain to others.”

He went to add that there are eight requirements or conditions for the acknowledgement of the capital of deposit-taking banks and financial institutions as tier 2 capital such as capital instruments that have at least five years of maturity and capital that is not guaranteed by issuers or relevant institutions or under any agreement that increase privilege in legal or economic payment same as depositors and general debtors of institutions.

The second proclamation lowers the highest risk weight rules from 100 percent or over 75 percent for registered micro, small and medium enterprises, 85 percent for businesses registered in agriculture, education and health care sectors, 80 percent for green finance projects and zero percent for government bond issuance and credit guarantee schemes such as Credit Guarantee Corporation of Cambodia (CGCC).

Chea Serey, NBC Deputy Governor, said last Thursday before the issuance of the two proclamations that these documents would contribute to the development of Cambodia’s economy as they would enable banks and financial institutions to release more loans to businesses that are registered with the Ministry of Commerce (MoC), General Department of Taxation (GDT) and other relevant institutions.

“The two proclamations will help small and medium enterprises receive finance at reasonable interest rates as they set incentive mechanisms for banks and financial institutions to release loans to [businesses in different sectors] agriculture, green financing and consumers-friendly loans such as school fee payment, transportation vehicle purchase, etc., but they have to be commercially registered and have proper accounting statements,” Serey added.

Credit to: Khmer Times, Publish on 04 July 2023

14th Board of Directors Meeting of Credit Guarantee Corporation of Cambodia (CGCC)

Posted on July 1, 2023October 23, 2023 by Sorn Chhorvyvatey

On 29 June 2023 at 2:00pm, CGCC organized the 14th Board of Directors Meeting at Rosewood Hotel under the chairmanship of H.E. Ros Seilava, Secretary of State of the Ministry of Economy and Finance, and Chairman of CGCC’s Board of Directors, with the presence of members of the Board of Directors and the state controller.

14th Board of Directors Meeting of Credit Guarantee Corporation of Cambodia (CGCC)

The agendas of this 14th Board of Directors Meeting included: (1) CGCC Progress Report, (2) Internal Audit Report on Centralized Operations, (3) PGS with Canadia Bank Plc., Sathapana Bank Plc., and Prince Bank Plc., (4) Establishment of Investment Committee, (5) Whistle Blowing Policy, and (6) Others.

CGCC’s Board of Directors Meeting is regularly organized to review, endorse, and approve CGCC’s activities and progress, especially the credit guarantee schemes, to ensure the transparency and efficiency of CGCC.

Dissemination Seminar on “Guaranteed Loans to Support the Development of Small and Medium Enterprises” in Kompong Thom Province

Posted on June 15, 2023June 19, 2023 by Sorn Chhorvyvatey

On June 07, 2023, the Credit Guarantee Corporation of Cambodia (CGCC) and Cambodia Chamber of Commerce (CCC) co-organized a seminar on “Guaranteed Loans to Support the Development of Small and Medium Enterprises” in Kampong Thom Province in collaboration with Kampong Thom – Preah Vihear Chamber of Commerce with more than 100 participants from Management and staff of participating financial institutions (PFIs) and small and medium business owners in Kampong Thom and other provinces. The seminar was also presided over by H.E. Tan Mony, Vice President of Kampong Thom – Preah Vihear Chamber of Commerce, Mr. No Lida, Deputy CEO of CGCC, Mr. Chuon Kimyan, Chief Executive Officer of Kampong Thom Techash Meanchey Union of Agriculture Corporative, and also the presentations by representatives from AMK Microfinance Institution and Canadia Bank as well.

Dissemination Seminar on “Guaranteed Loans to Support the Development of Small and Medium Enterprises” in Kompong Thom Province

Through this seminar, small and medium business owners are informed about 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 more.

Click here to read more about: Dissemination Seminar on “Guaranteed Loans to Support the Development of Small and Medium Enterprises” in Svay Rieng Province

CGCC visits PFIs provincial branches in Kompong Cham, Kompong Thom and Preah Vihear, to Enhance Collaboration on the Credit Guarantee

Posted on June 12, 2023June 15, 2023 by Sorn Chhorvyvatey

From 05 March to 09 June 2023, CGCC team led by Mr. No Lida, Deputy CEO of CGCC, visited provincial branches of selected participating financial institutions (PFIs) to discuss with the management and staff of the selected PFIs the implementation of CGCC’s credit guarantee schemes. The selected PFIs in 3 provinces including:

– Kampong Cham province: Chamroeun Microfinance, Maybank, and AMK Microfinance

– Kampong Thom province: Satahapana, ABA Bank, Canadia Bank and Prince Bank

– Preah Vihear Province: Prince Bank, Acleda Bank, ABA Bank and Sathapana Bank

The discussions with CGCC PFIs’ provincial branches in these 3 potential provinces provided opportunities for both CGCC and PFIs to enhance mutual understanding of credit guarantees and opportunities for PFIs to increase lending to borrowers that lack collateral when requesting loans.

CGCC visits PFIs provincial branches in Kompong Cham, Kompong Thom and Preah Vihear, to Enhance Collaboration on the Credit Guarantee — CGCC visits PFIs provincial branches in Kampong Cham, Kampong Thom and Preah Vihear, to Enhance Collaboration on the Credit Guarantee

Chamroeun Microfinance (Kampong Cham Branch)

Maybank (Kampong Cham Branch)

AMK Microfinance (Kampong Cham Branch)

Satahapana Bank (Kampong Thom Branch)

ABA Bank (Kampong Thom Branch)

Canadia Bank (Kampong Thom Branch)

Prince Bank (Kampong Thom Branch)

Prince Bank (Preah Vihear Branch)

Acleda Bank (Preah Vihear Branch)

ABA Bank (Preah Vihear Branch)

Sathapana Bank (Preah Vihear Branch)

CGCC, Maybank Cambodia, BNI-Super, and CWEA Sign MOU to Elevate SME Capacity and Capability Building

Posted on June 12, 2023February 7, 2024 by Sorn Chhorvyvatey

Phnom Penh, Cambodia – June 10, 2023 – Credit Guarantee Corporation of Cambodia (CGCC) and Maybank Cambodia have entered into a strategic partnership with Business Network International (BNI-Super) , 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, CGCC, Maybank Cambodia, BNI-Super, and CWEA will collaborate to provide trainings and workshops to the members of BNI and CWEA, and other SME communities to help them expand their businesses. The trainings will cover a range of topics relating to financial literacy and business operation.

CGCC, Maybank Cambodia, BNI-Super, and CWEA Sign MOU to Elevate SME Capacity and Capability Building

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, highly witnessed by H.E. Dr. Sok Siphana, Founding Partner of SokSiphana & associates and Chairman of Asian Vision Institute, inked by Mr. Wong Keet Loong, Chief Executive Officer of CGCC, Mr. Rath Sophoan, Chief Executive Officer & Country Head of Maybank Cambodia, H.E. Chea Ratha, Vice President of CWEA, and Mr. Kruy Rithy, President of BNI-Super.

Mr. Rath 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.”

“Following the success of the BCC Programme in 2022 with CGCC, this year, we want to continuously fulfil our promise to humanise financial services by taking it to the next level through renewing and expanding our collaboration with two more partners namely CWEA, and BNI,” he added.

Mr. Wong Keet Loong, Chief Executive Officer of CGCC said “We are excited to partner with Maybank again this year for the BCC Programme, and the expanded outreach with BNI and CWEAto launch this important programme. 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”

H.E. Chea 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. We encourage all CWEA members and women entrepreneurs alike to take advantage of this opportunity to grow and learn.”

Mr. Kruy Rithy, President of BNI-Super also expressed his/her optimism on the training. He/she 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.”

In this signing ceremony, there was also a panel discussion on “Cambodia Economic Outlook, Challenges and Opportunities of SMEs”, participated by 4 panelists: H.E. Dr. Sok Siphana, H.E. Chea Ratha, Mr. Rath Sophoan, and Mr. No Lida, Deputy CEO of CGCC.

In 2022, the BCC Programme trained nearly 100 SMEs and financial advisors on various topics including business registration in Cambodia, importance of financial discipline, branding and digital marketing, as well as the aspects of managing human resources. The trainings were presented by subject-matter experts and professionals from locally renowned law firms, business consulting, advertising agencies and financial institutions.

Meet the Pig Farm Business Owner Who Received a Credit Guarantee from CGCC to Support His Business

Posted on June 12, 2023September 13, 2024 by Sorn Chhorvyvatey

Read and Download in PDF: Mr. Sok Nalen, owner of a pig farm using a large-scale biogas plant Kampong Chhnang province

In 2014, I started this pig farm business. Initially, this farm was a farm raising piglets, but in 2019 this it was transformed into a bigger farm supplying meat.

When starting this business, I faced two main challenges: technical and financial challenges. Technology changes rapidly from one year to another requiring businesses to have enough capital to keep up with it. Based on the technical standard, my farm must have a biogas plant to protect the surrounding environment by reducing emission of toxic fumes and odors. The biogas plant can also recycle waste and other residuals. Fortunately, Biogas Technology and Information Center (BTIC) provided technical support to me to restore and set up a biogas plant for my farm. However, I need more capital. With the cooperation with CGCC, BTIC introduced me to a way to access non-collateralized loans with credit guarantees. With CGCC’s guarantee, I could get a business loan from Canadia Bank as requested on time without collateral. The guaranteed loan served as my working capital, which allowed me to continue building a new biogas plant to support my pig farm.

Obtaining guaranteed loans depends on the potential of my business, namely the possibility of growth, a good credit history, and the required documents that prove the need for the loan for my business. Other business owners who require additional capital, but no collateral can also seek for credit guarantee from CGCC through CGCC’s PFIs.

Understanding CGCC Portfolio Guarantee Scheme

Posted on June 12, 2023September 13, 2024 by Sorn Chhorvyvatey

It has been two years since CGCC launched Cambodia’s first-ever public credit guarantee scheme on 29 March 2021 – the Business Recovery Guarantee Scheme (BRGS) – when Cambodia was at the peak of the COVID-19 Pandemic. Shortly after the launch, Cambodia experienced a 3-week lockdown on 8 April 2021. In that situation, the credit guarantee was more needed than ever when potential businesses struggled to access the required capital to stand on their feet. Two more schemes were then introduced: Co-financing Guarantee Scheme (CFGS) and the Women Entrepreneurs Guarantee Scheme (WEGS) to support businesses. The BRGS, CFGS, and WEGS are regarded as the Individual Guarantee Scheme (IGS), which means the PFI shall seek guarantee approval from CGCC on a piecemeal basis before each guaranteed loan disbursement.

On 1 January 2023, CGCC hit a new milestone by introducing the Portfolio Guarantee Scheme (PGS) after approval was granted by the Deputy Prime Minister, Minister of Economy and Finance. PGS is a scheme under which guaranteed loan criteria are pre-agreed by CGCC and PFI to enable the PFI to enroll multiple loans in PGS without having to get CGCC’s guarantee approval on each loan prior to loan disbursement. As such, PGS enables quicker outreach and turnaround time than the previous Individual Guarantee Schemes (IGS).

Understanding Credit Guarantee-Interview with LOLC Microfinance Institution

Posted on June 9, 2023September 13, 2024 by Sorn Chhorvyvatey

Read and Download in PDF: Hear from Our PFIs – Interview with LOLC Microfinance Institution

1. What is LOLC’s perspective toward the credit guarantee schemes and why does LOLC to partner with CGCC?

LOLC Management is pleased to participate with CGCC to seize the partnership opportunity to further expand the market through new lending with CGCC guarantees. This credit guarantee scheme is very important for both LOLC and its clients, especially those who do not have collateral to provide access and encourage small and medium enterprises in Cambodia to access easy capital at low-interest rates to rehabilitate, start or expand their businesses.
LOLC joins CGCC as a participating financial institution, seeing that this credit guarantee scheme plays an important role in supporting the overall national economic growth, giving access to small and medium enterprises in Cambodia to access to financing to rehabilitate, start and expand their businesses, at the same time providing local employment opportunities for people to have jobs and income to support their families.

2. How do the credit guarantee schemes benefit LOLC and your customers?

In collaboration with CGCC, LOLC has the opportunity to further expand the potential market and have the confidence to expand lending to potential clients who have enough repayment capacity and want to expand their businesses but do not have sufficient collateral. In addition, the CGCC credit guarantee scheme plays an important role in fulfilling the needs of clients to expand their business and eliminate their worries from the words, “No matter how good his/her business is, without collateral, they are not able to borrow money from microfinance institutions or banks”. But now, even without collateral, clients can borrow money from microfinance institutions or banks to do business if they are able to make repayments and have a clear business plan.

3. What is LOLC’s strategy in structuring loans with CGCC’s guarantees? What are the main criteria of LOLC’s loan assessment?

In fact, LOLC has developed some clear strategies in structuring loans under the CGCC credit guarantee, such as:

Providing loans to clients who have clear and legal business, good cash flow, good credit history, whether the clients have collateral or no collateral, especially lending to clients who are small and medium enterprises (SMEs) aiming to expand their businesses, which contribute to society by providing employment to people with a decent income to support their daily family life.
Providing loans to clients who have a risky business but expect the business to improve soon.
Providing loans to key priority sectors that can contribute to the rehabilitation and upliftment of clients affected by the Covid-19 pandemic, which LOLC expects clients’ businesses to improve soon.

To assist potential clients in obtaining a guaranteed loan, LOLC has some criteria for loan assessment as the following:

Clients shall have clear and legal businesses.
Clients shall have a good cash flow to be eligible to get the loan and be able to repay it back.
Clients shall have a good reputation and good repayment history.
Clients shall have a clear business plan and clear purpose of using the loan effectively.
Clients can have some working capital in their business.
The client’s business is in good condition with quality products and services, reasonable prices, market needs, staff, and leaders with experience and skills.
Clients who have or do not have collateral or have collateral but not sufficient can also get the loan.

4. LOLC is CGCC’s Top 4 PFIs in disbursing guaranteed loans in 2022. What is the LOLC’s strategy to keep up with this momentum and to further expand the disbursement of guaranteed loans in 2023?

LOLC will continue providing more credit to clients, for those who have collateral and no collateral, to meet their needs for all sectors to improve their living standards and to continue contributing to the royal government to promote economic growth in Cambodia. Through this, LOLC will further encourage the branch management to disseminate this credit guarantee scheme widely to all target customers, especially new customers who have not yet received a loan from LOLC, for clients who have collateral or do not have collateral or have collateral but not sufficient. The most important thing is that clients have a clear legal business, a good reputation, a good credit history, strong cash flow, and good business conditions.

5. Besides providing guaranteed loans, what LOLC and CGCC should do together to support the MSMEs in Cambodia?

In addition to providing credit services, CGCC and LOLC will continue working together to support non-financial services to increase the understanding or additional skills related to financial literacy to entrepreneurs, especially small and medium business owners in Cambodia, to give them more knowledge on governance, financial literacy such as cash management, expense management, which contributes to more efficient business management of clients.

Meeting with the Cambodian Rice Federation to discuss the possibility of cooperation to support the Cambodian rice sector

Posted on June 6, 2023November 10, 2023 by Sorn Chhorvyvatey

On 06 June 2023, at the Secretariat office of the Cambodia Rice Federation (CRF), Mr. Wong Keet Loong, CEO of CGCC, and two CGCC team members attended a meeting with Oknha. Chan Sokheang, president of CRF, to discuss the collaboration to support Cambodia’s rice sector.

In this meeting, both parties discussed the situation of Cambodia’s rice sector as well as the plan to develop the Credit Guarantee Scheme to support access to guaranteed loans in this sector.

CGCC provides $120M credit guarantees to biz

Posted on May 19, 2023June 2, 2023 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

Tag: Credit Guarantee