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 ProvinceDissemination 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.
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.
CGCC, Maybank Cambodia, BNI-Super, and CWEA Sign MOU to Elevate SME Capacity and Capability Building
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.
CGCC, Maybank Cambodia, BNI-Super, and CWEA Sign MOU to Elevate SME Capacity and Capability Building
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”
CGCC, Maybank Cambodia, BNI-Super, and CWEA Sign MOU to Elevate SME Capacity and Capability Building
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.”
CGCC, Maybank Cambodia, BNI-Super, and CWEA Sign MOU to Elevate SME Capacity and Capability Building
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.
CGCC, Maybank Cambodia, BNI-Super, and CWEA Sign MOU to Elevate SME Capacity and Capability Building
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.
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.
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.
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.
On Friday, 12 May 2023, at the National Bank of Cambodia (NBC), Credit Guarantee Corporation of Cambodia (CGCC), led by Mr. Wong Keet Loong, CEO of CGCC, paid a courtesy visit to H.E. Rath Sovannorak, Assistant Governor and Director General of Banking Supervision of NBC.
CGCC’s CEO, Mr. KL Wong was very grateful for the warm welcome of H.E Sovannorak and his team and was very pleased to update on CGCC’s latest progress in providing credit guarantee and CGCC’s strategy that requires close cooperation and support from NBC.
In response, H.E. Sovannorak praised the progress made by CGCC and expressed his support for CGCC’s mission to provide guarantees on loans disbursed by banks and microfinance institutions (MFIs) to businesses that lack collaterals, especially SMEs, the backbone of the economy, and to raise SMEs awareness on financial literacy.
The meeting also discussed the latest development in the banking sector, new NBC regulations as well as ways to enhance cooperation to improve financial inclusion and access to finance.
The Credit Guarantee Corporation of Cambodia (CGCC) provided credit guarantees of $105 million as of February to businesses as their working capital for expansion.
In a factsheet issued on March 10, CGCC said that as of the end of February it has supported 1,155 businesses by providing credit guarantees for their loan applications, amounting to $104.9 million.
Large portions of the loan guarantee were used as working capital and other purposes of investment or business expansion, and capital expenditure, the report mentioned. As of January 2023, the outstanding guaranteed loan was $81.6 million while the outstanding guaranteed amount was $58.8 million.
Various credit guarantee schemes have played a crucial role in strengthening entrepreneurship and enhancing financial inclusion in Cambodia, especially during the Covid-19 pandemic, through the smooth disbursal of loans, CGCC said.
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) unveiled in September 2021 and the Women Entrepreneurs Guarantee Scheme launched in April 2022, besides the extension of the CFGS to tourism. The CGCC of the Ministry of Economy and Finance has extended the BRGS from January 1, 2023, until the $200-million scheme is fully utilised.
Updating some scheme features, including the scheme period, the definition of the micro, small and medium enterprises (MSMEs) and large firms, and the maximum loan amount for each guarantee are on the extension of BRGS.
BRGS aims to support businesses, including MSMEs and firms, to enhance their access to formal loans from Participating Financial Institutions for working capital, investment, and business expansion.
Credit Guarantee Corporation of Cambodia Plc (CGCC) reportedly issued a total of 1,155 Letters of Guarantee (LG) for loans worth $104.9 million equivalent as of February 28 – up 13 per cent year-to-date – as part of its mission to improve financial inclusion among small- and medium-sized enterprises (SME) and promote the sustainability and expansion of businesses worst hit by Covid-19.
As of January 31, the outstanding guaranteed amount was $58.9 million out of the $81.6 million worth of loans covered by the LGs, as noted by the state-owned enterprise in a new report, remaining in the 70-80 per cent target range at just over 72 per cent.
The CGCC was established by Sub-Decree No 140/ANKR/BK on September 1, 2020, and its $200 million Business Recovery Guarantee Scheme (BRGS) was launched on March 29, 2021 in a bid to widen access to formal loans from participating financial institutions (PFI) for working capital, investment and business expansions.
Cambodia Microfinance Association (CMA) chairman Sok Voeun lauded the CGCC’s credit guarantee arrangements as important tools for SMEs to access formal unsecured loans to keep their businesses afloat and expand in light of Covid-19 bruises.
He told The Post on March 13 that commercial banks accounted for 80 per cent of loans covered by the 1,155 LGs, while microfinance institutions (MFI) “partnering with the PFI” constituted the rest.
On the other hand, banking institutions accounted for about 95 per cent of the $104.9 million loan value, he said.
“We’ve provided credit to most of the priority sectors, including services, agriculture and manufacturing,” he affirmed.
“We are happy to join the CGCC because risks are guaranteed. We’ve noted that since the beginning of the project, the rate of bad loans has been minimal because the businesses have the potential to stimulate economic activity, although they may not have collateral.
“Hence the credit guarantee scheme has been a big help for them to expand their businesses,” he said.
The finance ministry has authorised the extension of the BRGS beyond December 31, 2022, until all funds have been utilised, an early-January CGCC statement confirmed, which noted that the terms of the scheme had also been updated, including the maximum guarantee amounts for differing categories of businesses.
The statement disclosed that loans, mostly unsecured, totalling about $89 million were guaranteed by the CGCC as of December 31 under the BRGS.
Cambodia Post Bank Plc, one of the PFIs, accounted for roughly $1 million of that, all of which went to SMEs, confirmed its CEO Toch Chaochek, telling The Post on March 13 that the plan is to increase that to $5-10 million in 2023.
To this end, the bank aims to shift its focus, from large SMEs with adequate collateral that are seeking to expand, to smaller ones without the assets needed for the secured loans to do the same, he revealed.
“The CGCC project is great for SMEs that do not have the collateral to obtain the loans – they have a shot at rehabilitating and expanding their businesses,” Chaochek said.
The 11th Give a Day has featured the Credit Guarantee Corporation of Cambodia as its keynote as well as enabled Cambodia’s entrepreneurial ecosystem to connect at the new Khmer Enterprise Headquarters for the first time in 2023.
Khmer Enterprise CEO Dr. Chhieng Vanmunin delivered the welcoming remarks highlighting the ongoing progression of the initiative which was first piloted in 2021 before receiving its full funding for monthly and quarterly meetings in 2022 and has now been renewed for 2023.
“The Give a Day monthly meetings and quarterly ecosystem builder events have been greatly welcomed by Cambodia’s entrepreneurial community – and have provided both learnings and networking opportunities between various sectors,” he told over 50 attendees from the ecosystem at KE headquarters.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentSabine Joukes Pact Cambodia Country Director and WE Act Chief of Party, Khmer Enterprise CEO Dr. Chhieng Vanmunin, Rajiv Pradhan Country Director at Swisscontact in Cambodia.
“We also wanted to welcome everyone to our new headquarters at the Business Development Center in Chroy Changvar, Phnom Penh, and advise that our open working space is available to everyone in the ecosystem as well as both our meetings’ rooms and event space,” he added.
Rajiv Pradhan Country Director at Swisscontact in Cambodia and Sabine Joukes Pact Cambodia Country Director and WE Act Chief of Party echoed this statement adding it was fantastic to reconnect the ecosystem for the first time in 2023.
Increase credit guarantee issuance by 50% in 2023
Delivering the keynote CGCC CEO, Wong Keet Loong commented the scheme was looking to increase the number of transactions it underwrites by 50% in 2023 as the organization looks to increase its outreach to the country’s micro and small and medium businesses, (MSMEs).
CGCC received its sub-decree on September 2020 and was fully incorporated in November 2020 its guarantees are intended to expand the availability of credit to smaller enterprises that may not have the collateral which banks typically require to advance working capital loans.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentConversations after the keynote presentation.
Initially launched as a tool to close the credit gap that emerged between small businesses during the pandemic, the CGCC issued its first guarantee in April 2021 and has since given a total of 985 Letters of Guarantee (LG) for loans worth $92.7. Mr Loong said that the CGCC had even more ambitious targets for 2023.
“My biggest goal for this year is to increase the outreach of our guarantees. The CGCC wants to provide guarantees to 1500 SMEs this year. We want to guarantee $100 million of loans in 2023. I know that is optimistic but I believe it can be done,” he said in response to a question from Cambodia Investment Review.
Rising interest rates may impact growth
Mr Loong said that the main barrier to reaching this target was the global macro picture, particularly the impact of rising US interest rates.
“The main issue right now is that external factors are affecting the cost of funding, which is going up as US interest rates rise and this is affecting a number of financial institutions (FIs). They see that fixed deposit rates are going crazy which is good for depositors, but not FIs and this impacts their lending,” he added.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentAttendees at the 11th Give a Day.
Global factors may act as a drag on the CGCC’s work in the near term, but fellow speaker H.E. Dr. Chhieng Vanmunin, CEO of Khmer Enterprise, said that if credit guarantees become more widely used in Cambodia it would make it much easier for firms to do business internationally.
“In their current state, a lot of Cambodian companies are unable to demonstrate a track record of success, however, if they run through the credit guarantee program with CGCC it provides a history of how well they managed issues such as shipping and cash flow.
So this is one of the things that we support them to expand their market internationally,” he said.
40% of its guarantees go to female-owned businesses
The CGCC currently offers four different guarantee products and in April last year, it launched it’s third the Women Entrepreneurs Guarantee Scheme (WEGS), a $50m capped fund that is aimed at supporting women and female-owned businesses.
According to the CGCC’s data up to 40% of its guarantees go to female-owned businesses, whereas Mr Loong said that up to 65% of Cambodian MSMEs were run by women. An audience member, who didn’t identify herself, suggested that this gap was partly due to issues over lack of financial knowledge.
“One reason is that we know most women entrepreneur’s businesses are not registered and one way to improve that is via financial literacy, and this will have many benefits. If financial literacy is growing then entrepreneurs are more confident, more informed, and able to negotiate good loans,” she said.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentQuestions and answer session.
Mr Loong responded that the CGCC did support unregistered businesses, for the first year at least and that expanding awareness of credit guarantees should in turn increase the number of registrations by female business owners.
“However, we tell customers that you need to be registered after a year, because when the anniversary comes, if you’re not registered, then we charge you an additional 0.5%. So, in a way, it incentivizes businesses to be registered. But when they come on board, they can be unregistered,” he said.
The Give a Day program returns in 2023
Give a Day is an initiative within the Entrepreneurship Ecosystem Building Project (EEB) which is jointly funded by Khmer Enterprise, USAID’s WE Act Project through Pact Cambodia and Swisscontact.
In addition, to monthly meetings, the initiative also included a quarterly Ecosystem Builders Network (EBN) event that focused on mapping the six pillars of Isenberg’s Model of the Entrepreneurial Ecosystem.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentThe 11th Give a Day program at Khmer Enterprise Head Office on February 10, 2023.
The quarterly meetings created a space through which ecosystem builders and government agencies can share information, foster best practices, identify market gaps and opportunities, and explore collaboration or complementarity to strengthen the ecosystem.
Cambodia’s ESO ecosystem, broadly defined as groups that support, train, and fund entrepreneurs is still in the nascent stage with many new organizations launched to help nature and develop the sector.
On 10 February 2023, Mr. Wong Keet Loong, CEO of CGCC, provided a Keynote Presentation on “Credit Guarantee Schemes of CGCC and its Role in Enterprise Development” at “Give a Day” event, co-organized by Swisscontact, Khmer Enterprise, and Pact Cambodia, and presided over by H.E. Dr. Chhieng Vanmunin, Mr. Rajiv Pradhan, Country Director of Swisscontact, Ms. Sabine Joukes, Chief of Party, WE Act/Pact Cambodia, and participated by almost representatives from Entrepreneur Support Organizations (ESOs), investors and business associations.
CGCC and Role of Credit Guarantee Schemes in Enterprise Development of “Give a Day” Event
“Give a Day” is a forum gathering the entrepreneurial ecosystem community in Cambodia that are mutually supporting each other with the willingness to bring any open discussion related to entrepreneurship for effective solutions. Today’s “Give a Day” event theme is credit guarantee schemes that are a gateway for SMEs to access formal loans, therefore it is crucial that SMEs and ESOs understand the schemes.
Mr. KL Wong introduced credit guarantee schemes’ journey in Cambodian Financial Ecosystem and its role in supporting potential MSMEs to be able to obtain an easier and larger amount of loans under CGCC’s credit guarantee through CGCC’s participating financial institutions. Participants were pleased to learn about the benefits of credit guarantees and how this financial instrument could address the challenges in access to finance that their members and network are currently facing.
CGCC and Role of Credit Guarantee Schemes in Enterprise Development of “Give a Day” EventCGCC and Role of Credit Guarantee Schemes in Enterprise Development of “Give a Day” Event
