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MAFF, CGCC ink pact to Develop Modern Farming Community

Posted on by Sorn Chhorvyvatey

Ministry of Agriculture, Forestry and Fisheries (MAFF) and Credit Guarantee Corporation of Cambodia (CGCC) Tuesday signed a Memorandum of Understanding (MoU) to promote the development of the modern farming community.

The MoU signing ceremony was presided over by Dith Tina, Minister of Agriculture, Forestry and Fisheries (MAFF) and Ros Seilava, Secretary of State of the Ministry of Economy and Finance and Chairman of the Board of Credit Guarantee Corporation of Cambodia (CGCC) at the Ministry of Agriculture.

Underlining the essence of the MoU, Tina said the new cooperation will have a production based on market demand, good quality, reduce production cost and economic efficiency.

Tina further said that developing the modern farming community is the priority of the Royal Government of Cambodia.

“Modern farming community plays an important role and acts as a strong shield in helping farmers who lack technology, face climate change challenges, lack credit and face market risks. Farmers who volunteer to become members of the modern farming community will receive sufficient investment and capital for potential agricultural products such as rice, cassava and cashews,” the minister said.

Applauding the Credit Guarantee Corporation of Cambodia (CGCC), Tina said CGCC is a good partner in evaluating and providing key inputs to the business plan for the modern farming community to become a reality and be successful.

CGCC is a state-owned enterprise under the financial and technical guidance of the Ministry of Economy and Finance with a main mission to provide credit guarantees to improve financial inclusion and support the development of small and medium enterprises.

Khim Finan, Undersecretary of State and spokesman for the MAFF wrote on his social media on Tuesday that the MoU between the Ministry of Agriculture and the CGCC will open the way for modern farming communities to have capital to cover their operating expenses and as well as receive lower interest rates than other general loans.

“Due to the robustness of the business plan and the clear marketing contracts in advance, CGCC is prepared to provide a credit guarantee service on behalf of the community, which will allow the community to have enough resources to run its operations with no need for each member to have bank debt. This is another important step for our modern community,” said Finan.

Speaking at the ‘7th Cambodia Rice Forum 2024’ under the theme ‘Transforming the Cambodia Rice Supply Chain to be Resilient, Inclusive and Sustainable’, Prime Minister Hun Manet lauded the efforts and achievements of modern farming communities and called for more such farming communities across the country.

He added that so far, the development has taken place with 8 modern farming communities covering almost 2,000 hectares in the first phase, and he called on keep continuing to do so to grow even more.

 

Credit to: Khmer Times, Published on 19 September 2024

 

SERC, CGCC Sign Pact to Promote Issuance of Guaranteed Bonds

Posted on by Sorn Chhorvyvatey

The Securities and Exchange Regulator of Cambodia (SERC) and Credit Guarantee Corporation of Cambodia Friday partnered to promote the issuance of guarantee bonds.

The memorandum of understanding was signed by SERC Director-General Sou Socheat and Wong Keet Loong, Chief Executive Officer of Credit Guarantee Corporation of Cambodia (CGCC).

The MoU aims to promote the development of the securities sector and the issuance of guaranteed bonds by supporting companies and financial institutions to obtain additional capital through the issuance of bonds including green bonds, social bonds, sustainability-linked bonds and sustainability bonds which are supported and guaranteed of repayment in case default by local guarantor to enhance local capital mobilization more effectively.

Both institutions also co-organized a workshop on “Benefits and Opportunities of Issuing Guaranteed Bonds in Cambodia” to raise awareness and disseminate the requirements to obtain guarantees for bonds and for small and medium enterprises (SMEs) and related institutions as well as highlight the benefits and opportunities of issuing guaranteed bonds.

Socheat said, “The MoU will attract more companies, including SMEs, to seek financing through the securities market and provide additional benefit for listed companies having demands for additional sources of financing in the form of bond issuance or other forms of debt, with the opportunities to obtain guarantees with special rates.”

Wong said that as the first and only bond guarantee institution in Cambodia, CGCC will play a key role in developing the growth of bond issuance listed on the Cambodia Securities Exchange (CSX). “This MoU with SERC is strategic to develop and work towards enhancing the securities framework to promote higher bond issuance to raise funding and attract more domestic and foreign investors,” he said.

This MoU will enable both parties to achieve the shared goal in terms of mutually supporting SERC for the development of the bond market, and CGCC to be the leading bond guarantee institution in Cambodia for improving financial inclusion and developing SMEs in Cambodia, said Ros Seilava, Secretary of State of the Ministry of Economy and Finance.

“This cooperation will bring a positive impact on the bond market in Cambodia by encouraging the issuance and investment of more bonds, including green bonds, social bonds, and sustainable bonds,” Seilava said.

 

Credit to: Khmer Times, Published on 02 September 2024

 

SERC and CGCC Sign MoU to Promote Guaranteed Bonds in Cambodia

Posted on by Sorn Chhorvyvatey

Cambodia

The Securities and Exchange Regulator of Cambodia (SERC) and the Credit Guarantee Corporation of Cambodia (CGCC) have signed an MoU. The agreement, aimed at promoting the development and issuance of guaranteed bonds in the country, was signed at the Non-Bank Financial Services Authority (FSA) Building under the auspices of H.E. Dr. Aun Pornmoniroth, Deputy Prime Minister, Minister of Economy and Finance, and Chairman of the FSA.

The signing ceremony was attended by senior officials, including H.E. Sou Socheat, Delegate of the Royal Government in Charge as Director General of SERC, and Mr. Wong Keet Loong, Chief Executive Officer of CGCC. The event was presided over by H.E. Ros Seilava, Secretary of State of the Ministry of Economy and Finance, Chairman of CGCC, and Vice Chairman of the Board of the FSA.

Support The Growth Of The Securities Sector In Cambodia

This MoU marks a collaborative effort to support the growth of the securities sector in Cambodia, particularly through the issuance of guaranteed bonds. These bonds, including green bonds, social bonds, sustainability-linked bonds, and sustainability bonds, will be guaranteed by local institutions to enhance confidence among investors. The guarantee mechanism is designed to mitigate the risks associated with bond issuance, thereby encouraging more companies and financial institutions to raise capital through this avenue.

Read More: SERC and ACLEDA Bank Strengthen Commitment to Developing Capital Market Talent

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

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

CGCC To Be The Leading Bond Guarantee Institution In Cambodia

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

Read More: Leader Talks with H.E. Sou Socheat on SERC’s Vision for Cambodia’s Securities Markets from 2024-2028

The MoU signing was followed by a workshop titled “Benefits and Opportunities of Issuing Guaranteed Bonds in Cambodia.” The workshop aimed to raise awareness among small and medium enterprises (SMEs) and related institutions about the opportunities and benefits of issuing guaranteed bonds. It also provided insights into the requirements for obtaining guarantees for bonds, facilitating better understanding and participation in the bond market.

The event attracted a broad range of participants, including senior representatives from the General Secretariat of the FSA, regulators under the FSA, the Cambodia Securities Exchange (CSX), the Cambodia Association of Securities Firms, the Cambodia Chamber of Commerce, the Young Entrepreneurs Association of Cambodia, the Association of Banks in Cambodia, the Rating Agency of Cambodia Plc., and various listed companies. A total of 100 participants attended the event, which featured expert speakers from SERC, CGCC, Telcotech LTD., Royal Group Securities Plc., and Prudential (Cambodia) Life Assurance Plc.

 

Credit to: Cambodia Investment Review, Published on 02 September 2024

 

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

Posted on by Sorn Chhorvyvatey

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

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

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

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

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

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

 

Means of Contact:

SERC

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

CGCC

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

 

About SERC

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

 

About CGCC

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

 

 

Women Entrepreneur Scheme 40% of CGCC Guaranteed Loan Book

Posted on by Sorn Chhorvyvatey

More than 40 percent of all loans guaranteed by the Credit Guarantee Corporation of Cambodia (CGCC) have been given to women entrepreneurs, CGCC CEO KL Wong in an exclusive interview told Khmer Times.

Currently, CGCC has guaranteed loans amounting to $200 million to 2,366 micro, small and medium enterprises (MSMEs) accounts as it marked three years of operation. Started during the Covid-19 pandemic to help businesses tide over the economic downturn, CGCC said it now has an outstanding guaranteed loan amount of $129 million and an outstanding guaranteed amount of $94 million from lending to MSME businesses that have provided jobs to more than 52,000 people in Cambodia.

Under the Women Entrepreneurs Guarantee Scheme (WEGS) there are many benefits for women taking a CGCC-guaranteed loan. Among the benefits are lower interest rates with the bank, a lower guarantee fee for the first year and higher coverage of loan guarantee, said Wong. Expanding, he said, that the guarantee fee for SMEs under the CGCC’s Business Recovery Guarantee Scheme (BRGS) was 1 percent. But for women entrepreneurs, this fee has been reduced to 0.5 percent from 1 percent for the first-year of the loan tenure. Apart from that, for SMEs under the BRGS scheme, about 70 percent of the loan is covered/guaranteed by CGCC. Whereas for the women entrepreneur scheme as high as 80 percent of the loan amount is guaranteed by CGCC.

The CGCC so far has supported many women entrepreneurs in diverse fields. One of the beneficiaries of its scheme is Rithypul founder and CEO Bopha Pen. In 2020, her financial awareness startup had a liquidity crunch. Needing working capital for day-to-day operations, she sought a bank loan. However, her collateral proved insufficient till CGCC stepped in and guaranteed her loan with one of its partner financial institutions CAMMA Microfinance.

Today Bopha, runs Rithypul and has launched training centres and a fintech mobile app Kotluy.

Another woman entrepreneur, who has benefitted from CGCC’s loan guarantee, is Thida Kheav’s SOGE. SOGE (also known as Solar Green Energy (Cambodia) Co), which is a renewable energy semiconductor manufacturer, lacked capital outlay for expansion. Till CGCC stepped in.

CGCC CEO KL Wong has said that the government is keen on giving priority to women-led businesses. When it first launched in 2021, about 23 percent of its total borrowers were women. This number went up to 35 percent of total borrowers in 2022. By the end of 2023, as high as 42 percent of CGCC’s total loan portfolio guaranteed is for women.

“We are proud of the gender diversity in our portfolio,” said Wong. CGCC currently has five loan guarantee schemes. Apart from WEGS and BRGS, CGCC has the Co-Financing Guarantee Scheme (CFGS), the Co-Financing Guarantee Scheme for Tourism (CFGS-TR) and Portfolio Guarantee Scheme (PGS).

CGCC CEO said that their scheme is tailored for SMEs, who form a vital part of Cambodia’s economy. SMEs represent 70 percent of employment opportunities in the country and contribute 58 percent to the country’s GDP. CGCC said that it is currently backing SMEs from diverse fields like agriculture, services, industry and services.

Wong also said the WEGS scheme has a ceiling cap for interest rates on loans. For the first-year interest rate the ceiling, inclusive of the first-year guarantee fees, was 8 percent for riel-denominated loans and 9 percent for dollar-denominated loans. And for microfinance institutions (MFIs) and deposit-taking institutions (MDIs), women could take loans that were fixed at an upper ceiling of 10 percent for riel-denominated loans and 11 percent for dollar-denominated loans.

He said women-led businesses were eligible for all types of loans, including term loans, overdrafts, trade financing facilities, etc. There was the option not just for new loans but also for refinancing old loans. CGCC said that it is currently guaranteeing both secured and unsecured loans. The maximum loan amount for working capital loans is $300,000
and the maximum amount for investment and business expansion plans is $500,000.

Credit to: Khmer Times, Publish on 16 August 2024

Understanding Financing Options for Businesses

Posted on by Sorn Chhorvyvatey

What are the available financing options for your business? In today’s dynamic business environment, securing the right financing is the key to propelling businesses towards success. Whether it’s borrowing from family members or raising funds from the public through an initial public offering (IPO), each avenue has its own unique characteristics suitable for businesses in different circumstances. Exploring financing options is a strategic approach to building a strong and sustainable financial foundation for the business.

1. Debt Financing

Debt financing is a method for businesses to raise funds by borrowing from lenders such as family, friends, financial institutions, or investors. The borrower is required to repay the loan principal plus interest during the debt’s maturity. Debt financing is a common and straightforward way to secure funds for business operations.

A loan from family or friends is the most appealing option for start-ups and small businesses. These loans and loans from other unregulated and unlicensed lenders are considered informal loans. This financing typically does not require a business track record, comes with loose terms and minimal paperwork, and is quick and easily accessible. However, informal loans have many drawbacks. For example, the borrowers’ creditworthiness is not properly assessed, which often results in a high loan default rate and the borrower’s high indebtedness. Furthermore, there is no standard loan restructuring to help the borrowers who face financial difficulty, and the recovery of the informal loan can be very harsh, leading to relationship breakdown. This risk underscores the need for caution and careful consideration when opting for this type of financing.

Another type of debt financing option is bank loans. Understanding and demonstrating the 5Cs—character, capital, collateral, capacity, and condition—is crucial when considering formal bank financing. Formal bank loans provide a better loan handling process. Bank loans are strictly regulated, and the banking regulations are designed to protect consumers and banking stability. CGCC has supported businesses in access to formal banks loans by providing credit guarantees which act as collateral for the borrowers.

Once a business matures, generally after 3 years or more of successful operation, it can consider raising funds through bond issuance. A bond is a fixed-income debt instrument, an alternative to a bank loan. Lenders lend money to the borrowers by purchasing the bonds issued by the borrowers who promise to pay back the principal plus interest during the maturity of the bond. Compared to a bank loan, a bond offers more flexibility in structure, size, maturity, and interest payment. The comparison between bank loans and bonds is explained in CGCC’s Newsletter Issue 9. CGCC launched the Bond Guarantee Scheme in January 2024 to support corporations issuing bonds in Cambodia.

2. Equity Financing

Equity financing is a method of raising capital by selling a portion of business ownership to investors. When investing in a company’s equity, the investors become shareholders of the business and may be able to influence critical company decisions. While equity investors are not entitled to fixed interest payments from the business, they share the profit and loss of the business. Equity financing can be raised through a private offering from angel investors and venture capital or a public offering from public investors.

An angel investment is an equity investment by angel investors (wealthy individuals with business experience) who purchase ownership of a business, usually a start-up, that they find attractive and have the potential to grow and generate high profits. To raise funds from angel investors, the business owners should have a solid business plan that can convince the angel investors to invest. Unlike angel investors, who invest their own money in the business, venture capitalists use a pool of funds from individual and institutional investors. Venture capital conducts stricter due diligence on the businesses before deciding to invest and can provide technical assistance and managerial experience to improve the operation of the company.

Another financing option is an initial public offering (IPO), a process of selling company shares to public investors for the first time. Since the funds are raised from the public, a publicly listed company is required to go through rigorous due diligence and comply with strict disclosure requirements. Therefore, IPO can increase the company’s publicity, credibility, and greater access to financing for long-term future growth. The process of IPO is regulated by the Securities and Exchange Regulator of Cambodia.

 

Read more: Understanding Financing Options for Businesses

 

Understanding Credit Guarantee-Interview with Participating Financial Institution (FTB Bank)

Posted on by Sorn Chhorvyvatey

1. What is FTB Bank’s perspective towards the credit guarantee schemes and why does your bank partner with CGCC?

As the first commercial bank in Cambodia, a truly local bank trusted since 1979, FTB has been consistently contributing to develop the local market and economy through relentless supporting projects initiated by the Royal Government of Cambodia (RGC). The Credit Guarantee Corporation of Cambodia (CGCC) is a great initiative of the RGC, which focuses on business owners typically possessing no or insufficient collateral to access credit in a manner that they would otherwise be unable to obtain.

Being one of the earlier Participating Financial Institution (PFI), there are various opportunities presented to FTB, which are inclusive of:

  • Having further participation in the RGC’s initiatives to promote national economic growth by continuing to provide loans to customers who have real financing needs with solid business plan but do lack of collateral to pledge.
  • Contributing to the opportunities of creating jobs and employment for people through offering access to finance through credit guarantees scheme to Small and Medium-Sized Enterprises (SMEs) and Large Enterprises to enable them to enhance productivity and expand their business operations.
  • Creating new business opportunities for the Bank’s own operation through supporting new and existing clients to expand credit portfolio in alignment with the Bank’s strategic plan.

 

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

The credit guarantee schemes offer benefits to FTB and the customers in numbers of ways:

For Bank:

  • Introducing new credit opportunities for customers who need funding but lack of collateral to pledge, as well as represents a significant development in the banking sector, transitioning from traditional collateral-based loans, such as those secured by real estate and other property, to loan covered by the guarantee under this new scheme.
  • Maintaining the existing customers and attracting new potential ones to use FTB Bank’s services by providing flexible loans tailored to their needs and investment plans.
  • Mitigating credit risk by obtaining credit guarantees up to 80% of the loan amount from CGCC

For the Customers:

  • Enabling potential customers access to new loans through financial institutions licensed by the National Bank of Cambodia, even without sufficient collateral.
  • Getting comprehensive financial advice from bank experts who have received proper training from relevant institutions.
  • Empowering customers to expand their businesses according to their set plan.

 

3. So far, which type of loans the Bank use the credit guarantees to support SMEs?

Since being a Participating Financial Institution, FTB has been actively providing all types of loans to customers, such as Business Term Loans, Overdraft Loans and Revolving Loans to support credit guarantee schemes as follows:

  • Rice Export Guarantee Scheme (REGS)
  • Women Entrepreneurs Guarantee Scheme (WEGS)
  • Business Recovery Guarantee Scheme (BRGS)
  • Co-Financing Guarantee Scheme for Tourism (CFGS-TR)

 

4. How should the borrowers prepare themselves to get guaranteed loans from the Bank?

To obtain the guaranteed loans from the FTB Bank, business owners shall meet the following key criteria among various requirements:

  • Businesses with a Cambodian shareholder (shareholding of more than 50%) and sufficient capital to participate in investment projects, intending to utilize the loan in accordance with the CGCC’s requirements.
  • Business registration issued by the legalized government authorities.
  • Unregistered businesses must be registered with relevant authorities after receiving the loan.
  • Businesses with sufficient income to ensure their ability for loan repayment to the bank.

 

5. What is the Bank’s strategy/plan to further expand the disbursement of guaranteed loans in 2024?

In alignment with our strategic plan, FTB will continue to offer guaranteed loans with numbers of key priorities and actions including:

  • Continuing to actively promote our services to both existing and new customers who have a potential and solid plan to expand the business.
  • Developing a training program for all related lending staff to ensure they have a clear understanding and are well equipped to support the customers with their financing needs.
  • Continuing to collaborate with relevant parties to streamline the process of obtaining guaranteed loans to ensure convenience and speed from the CGCC.

 

Read and Download in PDF: Interview with participating Financial Institution (FTB Bank)

 

Understanding Credit Guarantee-Interview with Participating Financial Institution (Acleda Bank)

Posted on by Sorn Chhorvyvatey

Read and Download in PDF: Interview with Participating Financial Institution (ACLEDA Bank)

 

1. What is ACLEDA Bank’s perspective towards the credit guarantee schemes and why does your bank partner with CGCC?

Credit guarantee schemes of Credit Guarantee Corporation of Cambodia “CGCC” are good and essential schemes contributing to the development of the country’s national economy by providing credit guarantees to Small-sized and Medium-sized Enterprises (SMEs), and Large Enterprises which are financially viable but with insufficient or no collateral to enable them to get official loans from ACLEDA Bank as well as other PFIs. Through the credit guarantee from CGCC, the Bank could expand credit market, promote financial inclusion and manage credit risks effectively.

ACLEDA Bank has joined and become one of the participating financial institutions (PFIs) for the following main reasons:

  • Participate with the Royal Government’s initiatives and schemes to support the country’s socio-economic development.
  • Support and encourage SMEs and Large Firms to obtain formal loans from the licensed financial institutions for both working capital and business expansion.
  • Contribute to creating employment opportunities for people through the growth of businesses obtaining the formal loans under CGCC’s credit guarantee.

 

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

The credit guarantee schemes offer many benefits to both ACLEDA Bank and the customers as follows:

  • For ACLEDA Bank:
    • Diversify the credit products in line with the Bank’s strategic plan.
    • Manage credit risks effectively.
    • Maintain the existing customers and attract new potential ones.

  • For the customers:

    • Offer choices to the customers and be able to get formal loans for the expansion of their business activities.
    • Improve their living conditions through the growth of businesses.
    • Have a chance to create employment opportunities for their communities and promote innovation in their products and services.

3. So far, which type of loans does ACLEDA Bank use the credit guarantees to support SMEs?

So far, ACLEDA Bank uses the credit guarantees to provide business loans, revolving facility, and overdraft facility to our customers as SMEs and Large Enterprises in both priority and non-priority sectors to meet their business needs.

 

4. How should the borrowers prepare themselves to get guaranteed loans from ACLEDA Bank?

To obtain the guaranteed loans from ACLEDA Bank, the borrowers both individuals and legal entities shall meet the following criteria:

  • Business activities operate in Cambodia and majority Cambodian-owned businesses (shareholding of more than 50%)
  • Business registration issued by the appropriate government authorities
  • Financially viable businesses and accurate financial statements
  • Have owner equity and specific business plan
  • Loan utilization in accordance with the purposes as mentioned in the credit proposal
  • Willingness to comply with the loan obligations etc.

 

5. What is the ACLEDA Bank’s strategy/plan to further expand the disbursement of guaranteed loans in 2024?

ACLEDA Bank still continues to stimulate the disbursement of guaranteed loans in 2024 through promoting credit guarantees to both existing and new customers who need financing as well as  providing the trainings and refresher courses on the knowledge of credit guarantees to all the credit-related staffs of all branches nationwide, providing technical support for credit guarantees, especially having a good collaboration with CGCC to support and enhance the growth of guaranteed loans in a sustainable manner.

 

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​