On 13th December 2022, Mr. No Lida, CGCC’s Deputy Chief Executive Officer, led CGCC’s team to a Biogas-based power plant of a pig farm in Prey Nub District, Preah Sihanouk Province, and shared about CGCC’s credit guarantee schemes to the delegation, honorably participated by H.E. Tin Ponlok, Secretary of State of the Ministry of Environment, and Dr. Sar Chetra, Deputy Secretary General of the Ministry of Agriculture, Forestry and Fisheries. This site visit was coordinated by the United Nations Industrial Development Organization (UNIDO).
Exposure Visit to a Demonstration Site, a Biogas-Based Power Plant of a Pig Farm in Preah Sihanouk Province
The field visit is designed to increase participants’ knowledge as well as disseminate an understanding of the benefits and challenges associated with implementing this biogas technology in agriculture, especially in piggery farms in Cambodia. Other than that, this field visit also helps to increase the cooperation between relevant stakeholders, including government institutions, development partners, private sectors, financial institutions, and researchers.
Through this visit, the participants particularly banks gain a better understanding of how biogas-based power plants would benefit farm operations in both economic and environmental aspects. This will encourage banks to create loan products with favorable conditions for business owners in this sector, meanwhile, CGCC is pleased to contribute to providing credit guarantees to support more guaranteed loan disbursement for businesses with environmentally friendly aspects.
Exposure Visit to a Demonstration Site, Biogas-Based Power Plant of a Pig Farm in Preah Sihanouk ProvinceExposure Visit to a Demonstration Site, Biogas-Based Power Plant of a Pig Farm in Preah Sihanouk ProvinceExposure Visit to a Demonstration Site, Biogas-Based Power Plant of a Pig Farm in Preah Sihanouk Province
CGCC provides all staff with opportunities beyond knowledge and working experience development, as all staff is valuable and indispensable in achieving CGCC’s vision. As such, CGCC organized the annual staff retreat to Koh Rong Sanloem on December 9 to 11, 2022, to strengthen productivity and solidarity, and to appreciate all staff’s efforts in credit guarantee development.
This annual staff retreat has brought the opportunity for all staff to have a closer understanding of each other and got to share working experience with joyful and good cooperation. CGCC hopes that this meaningful retreat will strengthen solidarity, efficiency, and productivity, contributing to the development of CGCC, in line with the vision to improve financial inclusion and develop SMEs in Cambodia.
(Phnom Penh, 07 December 2022): Credit Guarantee Corporation of Cambodia (CGCC) and CIMB Bank officially announced the partnership with the signing ceremony of the Credit Guarantee Agreement to provide guaranteed loans to support micro, small and medium enterprises (MSMEs) in Cambodia for business expansion, investment, and/or working capital.
The partnership between CGCC, a state-owned enterprise, operated under the technical and financial guidance of the Ministry of Economy and Finance (MEF) and CIMB Bank, a commercial bank with a wide range of networks in Cambodia, will enable CIMB Bank to support and assist business entities which are financially viable requesting for financing by using guarantees under the CGCC’s Credit Guarantee Scheme (CGS) without having to provide collaterals.
CGCC and CIMB Bank Joint Hands to Provide Guaranteed Loans for Businesses that Lack Collaterals
Chief Executive Officer of CGCC, Mr. Wong Keet Loong mentioned that “This partnership with CIMB Cambodia marks our 25th participating FI, to provide guaranteed loans to support the micro, small and medium enterprises (MSMEs) to grow their business.”
“As of 30th November 2022, CGCC has guaranteed loans close to 900 MSMEs amounting to about $85mil of loans. We are optimistic that the credit guarantee will be used as a good risk sharing mechanism for loans to MSMEs during the recovery stage of the economy. The guaranteed loans by CGCC will boost the confidence of FIs in providing loans to support the growth of MSMEs.” said Mr. Wong.
Mr. Bun Yin, Chief Executive Officer of CIMB Bank, said in the ceremony that “This partnership opens an opportunity for CIMB Bank to support Cambodian MSMEs through its innovative banking products and services. The collaboration with CGCC has enabled MSMEs to obtain financing facilities from CIMB Bank at a competitive rate without having the need to provide collaterals.”
“This latest offering also reaffirms CIMB Bank’s commitment to support the development of MSME businesses, which form the backbone of Cambodian economy.” added Mr. Bun Yin.
CIMB Bank has now become one of the 25 Participating Financial Institutions (PFIs) committed to assisting business entities in line with the government’s direction to support SMEs.
The collaboration between CGCC and CIMB Bank will enable businesses and SMEs to borrow without collateral or alternatively getting a higher loan amount than the value of any collateral offered.
CGCC and CIMB Bank Joint Hands to Provide Guaranteed Loans for Businesses that Lack CollateralsCGCC and CIMB Bank Joint Hands to Provide Guaranteed Loans for Businesses that Lack Collaterals
About CGCC
CGCC is a state-owned enterprise established by a Sub-Decree of the Royal Government of Cambodia dated 01 September 2020. CGCC is operated under the technical and financial guidance of the Ministry of Economy and Finance (MEF) with the mission 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 November 2022, CGCC has supported 899 businesses by providing credit guarantees for their loan applications, amounting to USD 85.73 million equivalent. CGCC has provided the most guarantee to SMEs, which accounts for 95% of the total businesses receiving the credit guarantee from CGCC.
About CIMB Bank PLC
CIMB Bank PLC was established in Cambodia on 19 November 2010 with the opening of a commercial banking branch in the heart of Phnom Penh. Today, the Bank operates 14 branches across five major cities: Phnom Penh, Siem Reap, Preah Sihanouk, Battambang and Kampong Cham.
We currently serve more than 35,000 corporate and individual customers. In response to growing demand from our customers across Cambodia, the Bank offers a wide range of banking products and services including consumer, commercial, corporate & transaction banking and financial institution group. CIMB Bank PLC is a Cambodian subsidiary of CIMB Group, a leading focused ASEAN bank and one of the region’s foremost corporate advisors.
“I’m Financially Literate Program” was successfully launched by Sathapana Bank, in partnership with Khmer Enterprise, Manulife Cambodia, and Credit Guarantee Corporation of Cambodia (CGCC). The fourth cohort of this program was organized on 3 – 4 & 10 – 11 December 2022 to provide non-financial services to SMEs and MSMEs and especially women in business.
More than 20 Entrepreneurs and business owners attended the fourth cohort, and shared their experiences as well as related financial issues, and they also had the opportunity to learn more about entrepreneurship, prepare financial statements for Business, understand loans with banks and choose the right loan for their businesses.
CGCC Supports the Accelerating SMEs’ Financial Literacy through the “I’m Financially Literate Program” 4th Cohort
This training program is specifically designed to provide practical skills and experience related to financial literacy and business management skills, as well as access to business networks that can drive business growth for entrepreneurs, especially women entrepreneurs.
CGCC Supports the Accelerating SMEs’ Financial Literacy through the “I’m Financially Literate Program” 4th Cohort
On 05 December 2022 at 9:00am, CGCC organized the 12th Board of Directors Meeting at CGCC’s Head Office 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.
The agendas of this 12th Board of Directors Meeting included: (1) CGCC Progress Report, (2) PFIs Application, (3) New Guarantee Scheme, (4) Bond Guarantee Framework, (5) Amendment to Articles of Incorporation, 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.
12th Board of Directors Meeting of Credit Guarantee Corporation of Cambodia (CGCC)12th Board of Directors Meeting of Credit Guarantee Corporation of Cambodia (CGCC)12th Board of Directors Meeting of Credit Guarantee Corporation of Cambodia (CGCC)12th Board of Directors Meeting of Credit Guarantee Corporation of Cambodia (CGCC)12th Board of Directors Meeting of Credit Guarantee Corporation of Cambodia (CGCC)
Maybank Cambodia in collaboration with the Credit Guarantee Corporation Cambodia (CGCC) organised two workshops over the last two months to strengthen the capacity and capabilities of over 100 SMEs and financial advisors by providing business insights and knowledge as well as imparting new skills, techniques and technologies to improve their business operations.
The SME Building Capacity & Capability workshops, which were held at the Maybank Tower, provided a platform for networking, giving SMEs opportunities to connect with like-minded peers across industries to develop new insights into building and strengthening their businesses.
Rath Sophoan, CEO of Maybank Cambodia said that the bank understands that SMEs are confronted with increasing difficulties and challenges post-pandemic and have limited access to timely and accurate information as well as the necessary skills to meet the rapidly evolving market to remain competitive and resilient.
“We have introduced a comprehensive programme to help SMEs, which is a strategic and collective initiative that the Bank commits, in addition to the continuous efforts to support them gain access to financial assistance. In line with our mission to Humanise Financial Services and upon the success of our workshops, we plan to organise several more in the future as we see this being beneficial not only to the SMEs but also towards boosting the economy as SMEs are the backbone of the country,” he added.
All entrepreneurs were exposed to various topics including business registration in Cambodia, the importance of financial discipline, branding and digital marketing, as well as the aspects of managing human resources, presented by subject-matter-experts and professionals by law firms, business consultants, advertising agencies and financial institutions.
Wong Keet Loong, Chief Executive Officer of CGCC, said, “Our partnership with Maybank has enabled both parties to help improve financial literacy to build SMEs’ business operations and provide upskilling and growth opportunities to all the participants. These workshops aim to serve as a platform to fuel the SME growth further in Cambodia.”
He further added that Maybank and CGCC will continue to support local SMEs through various means, including financing facilities, business support instruments and technical advisory based on best practices to support SME growth, productivity and innovation, as well as enhance the competitiveness of SMEs.
On 22 November 2022, the training on “Procedure of Debt Securities Issuance” was held at the CGCC’s head office, highly presided by H.E. SOU Socheat, Delegate of the Royal Government of Cambodia in charge as the Director General of Securities and Exchange Regulator of Cambodia (SERC), participated by CGCC’s managements and related staffs, led by Mr. Wong Keet Loong, CGCC’s CEO.
This training aims to provide the General regulations and the Procedure of Debt Securities Issuance to CGCC, which CGCC will contribute to the development of the bond market by providing bonds guarantee as a part of debt securities.
Training on “Procedure of Debt Securities Issuance” for CGCC Provided by SERCTraining on “Procedure of Debt Securities Issuance” for CGCC Provided by SERCTraining on “Procedure of Debt Securities Issuance” for CGCC Provided by SERCTraining on “Procedure of Debt Securities Issuance” for CGCC Provided by SERCTraining on “Procedure of Debt Securities Issuance” for CGCC Provided by SERC
Maybank Cambodia in collaboration with the Credit Guarantee Corporation Cambodia (CGCC) organised two workshops held over the last two months in efforts to strengthen the capacity and capabilities of around 100 SMEs and financial advisors by providing business insights and knowledge as well as new skills, techniques and technologies to improve their business operations.
The SME Building Capacity & Capability workshops, which were held at the Maybank Tower, provided a platform for networking, giving SMEs in attendance opportunities to connect with like-minded peers across industries to develop new insights into building and strengthening their business.
Maybank and CGCC Organise Capacity Building and Capability Workshops for Around 100 SMEs in CambodiaMaybank and CGCC Organise Capacity Building and Capability Workshops for Around 100 SMEs in Cambodia
Mr. Rath Sophoan, CEO of Maybank Cambodia said that the Bank understands that SMEs are confronted with increasing difficulties and challenges post pandemic and have limited access to timely and accurate information as well as the necessary skills to meet the rapidly evolving market to remain competitive and resilient.
“As such, we have introduced a comprehensive programme to help SMEs, which is a strategic and collective initiative that the Bank commits, in addition to the continuous efforts to support them gain access to financial assistance. In line with our mission to Humanise Financial Services and upon the success of our workshops, we plan to organise several more in the future as we see this being beneficial not only to the SMEs but also towards boosting the economy as SMEs are the backbone of the country,” he added.
All entrepreneurs were exposed to various topics including business registration in Cambodia, the importance of financial discipline, branding and digital marketing, as well as the aspects of managing human resources, presented by subject-matter-experts and professionals by law firms, business consultants, advertising agencies and financial institutions.
Mr. Wong Keet Loong, Chief Executive Officer of CGCC, said, “Our partnership with Maybank has enabled both parties to help improve financial literacy to build SMEs’ business operations and provide upskilling and growth opportunities to all the participants. These workshops aim to serve as a platform to fuel the SME growth further in Cambodia.”
He further added that Maybank and CGCC will continue to support local SMEs through various means, including financing facilities, business support instruments and technical advisory based on best practices to support SME growth, productivity and innovation, as well as enhance the competitiveness of SMEs.
Maybank and CGCC Organise Capacity Building and Capability Workshops for Around 100 SMEs in Cambodia
Credit guarantee aims to support businesses, especially SMEs, access to formal loans. Under CGCC’s current schemes, CGCC provides credit guarantees on loans disbursed by banks and microfinance institutions that are the participating financial institutions (PFIs) to the borrowers. To reap the benefits of credit guarantees, the borrowers must be ready to apply for loans from the PFIs in the first place. Understanding how the PFIs assess the borrower’s creditworthiness helps the borrower better prepare to get the guaranteed loans.
Conditions
5 important things SMEs should understand to apply for guaranteed loans!
Before approving a loan, the bank must be convinced about the loan purpose and the appropriate loan amount for such purpose. How can the borrowers convince the bank? A reliable business plan and financial statement are good testimony to justify the loan purpose and amount. A proper business plan and financial records not only make it easier to borrow but also allow borrowers to critically examine the current business condition and plan better for success. Precisely, they help gauge the appropriate loan amount and repayment capacity. Indeed, borrowing the right amount matters. A surplus borrowing costs unnecessary accumulated interest, fees, and prepayment penalties, while inadequate borrowing may hinder potential business growth. This is called “condition,” one of the 5 Cs that banks use to evaluate borrowers’ creditworthiness.
Collateral
5 important things SMEs should understand to apply for guaranteed loans!
Given that the condition is satisfied, banks also require “collateral” to protect themselves against loan default. The banks typically provide loans worth about 70% of the borrower’s collateral value. The collateral requirement is one of the main challenges for borrowers’ access to loans from banks. According to IFC, of all small and medium enterprises that approached banks for loans, 66% were rejected because of lacking collateral requirements. This is why CGCC comes in. CGCC provides credit guarantees to banks to act as collateral on behalf of the borrowers. CGCC’s PFIs can assess the borrower’s creditworthiness by treating the credit guarantee as the borrower’s collateral. This reduces the collateral burden for the borrowers when applying for loans.
Capacity
5 important things SMEs should understand to apply for guaranteed loans!
The ability to repay the loan is the fundamental requirement for the bank to approve a loan. Regardless of satisfactory conditions and collateral or CGCC’s guarantees, the banks would not lend, and CGCC cannot guarantee if the borrowers cannot prove that they can repay the loans. So how can the borrower justify the “capacity” to repay? Again, this is when a reliable business plan and financial record can come into play. A proper financial statement tells the borrower’s assets, liabilities, equity, income, and cash flow which are reliable sources to evaluate the repayment capacity. Plus, the business plan describes the future business trajectory in which future income can also be used to justify the repayment capacity.
Capital
5 important things SMEs should understand to apply for guaranteed loans!
If banks provide business loans, they want to know how much own “capital” the borrower put into the business. This matters because it shows the borrower’s commitment to the company where the loan proceeds will be used. It shows “skin in the game.” How can the borrower master this? The proper financial record should show the owner’s equity in the business. Official supporting documents such as partnership agreement and company registration are valid evidence of the borrower’s investment in the company. Usually, banks find it more challenging to assess informal or unregistered businesses because they lack reliable sources of the document to validate their creditworthiness. That is why businesses are encouraged to register to improve their access to finance.
Character
5 important things SMEs should understand to apply for guaranteed loans!
Another criterion to prove the repayment capacity is the “Character” of the borrower. Notably, banks investigate the borrower’s credit records, including loan repayment history, number of loans, and current loan outstanding, etc. The primary purpose is to assess the borrower’s trustworthiness. Currently, Cambodia Credit Bureau (CBC) provides comprehensive credit reporting on individuals and businesses, which is helpful for banks to evaluate the borrower’s character. However, in some instances, if your credit records are not favorable, you need to strengthen other Cs to convince the banks. For example, during the COVID-19 Pandemic, many businesses face challenges leading to late debt repayment and loan default, adversely impacting their “Character” and “Capital.” In this case, to get loans, the borrowers need to demonstrate a solid business plan which can improve “Condition” and “Capacity” and utilize CGCC’s credit guarantees which can improve “Collateral.”
As we can see, the 5Cs – condition, collateral, capacity, capital, and character – are important factors that banks evaluate the borrowers before deciding to lend. Improving the 5Cs increases the chance of getting loans from banks. A reliable financial statement and business plan can be used to validate every Cs, while a credit guarantee can help address the “Collateral” issue.
