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Entrepreneurship Program Initiative of CGCC (EPIC) 3rd Series of 2024

Posted on by Sorn Chhorvyvatey

On 06 December 2024, at the Business Development Center, Credit Guarantee Corporation of Cambodia (CGCC), and J Trust Royal Bank, co-organized the EPIC 3rd Series of 2024 on “Effective Business Operation in the Digital Age for MSMEs”, participated by around 50 trainees from the Micro, Small, and Medium Enterprises (MSMEs), in which approximately 65% are women entrepreneurs, and around 10 students from the AMT scholarship-Alumni Association.

The EPIC 3rd Series of 2024 was attended with high honor for the certificate presentation ceremony to all participants, trainers and distinguished speakers by His Excellency Dr. Mey Vann, Secretary of State, Ministry of Economy and Finance and the chair of the Group 6 of the A.M.T Scholarship Students-Alumni Association, and under the honor presence of Lok Chumteav You Bory, Vice President of the Cambodian Women’s Association, Mr. No Lida, CEO of CGCC, Ms. Hang Chuon Narita, Chief of Corporate Banking of J Trust Royal Bank, Mr. Pea Vanchhay, Head of SME of Corporate Banking of J Trust Royal Bank, and the management teams of both CGCC and J Trust Royal Bank.

Through this EPIC 3rd Series of 2024, all participants learned about “Business Operations in the Digital Age for MSMEs” shared by Ms. Sem Sreytouch, Founder of EPL Pollinate Enterprise and President of Cambodia Honey Association. Ms. Sreytouch shared comprehensive digital tools to streamline business operations, how to use digital tools to increase sales, business operation management, customer relations and promotion of products or services, cyber security, and shared strategies for adapting to future market trends and digitalization to stay sustainable and competitive in the digital era. All participants also shared their own practical experiences with each other through active group discussions on topics surrounding the importance of using digital tools and systems, challenges in transitioning to digital, and suggestions or requests for enhancing the performance of MSMEs.

In addition, participants also learned about “Credit Guarantee Mechanisms to Support Access to Finance for SMEs” through a presentation by Ms. Lim Chanthida, Director of Centralized Operations of CGCC. In line with the credit guarantee mechanism, Mr. Poch Pisal, Relationship Manager of SME of Corporate Banking of J Trust Royal Bank, also shared  “Credit Assessment Process and Financial Solutions for Businesses, and in particular, Support for Women Entrepreneurs.” with participants.

Capacity-building is one of the priorities of CGCC in the mission of improving financial inclusion and developing SMEs in Cambodia. EPIC is the flagship entrepreneurs’ capacity-building program of CGCC that will provide training to MSMEs on relevant and practical topics of business operations and management for entrepreneurs in collaboration with related stakeholders/Participating Financial Institutions/participants.

 

Empowering Local SMEs to Compete Globally: New Export Finance Solution and Capacity-Building Programme Launched

Posted on by Sorn Chhorvyvatey

Phnom Penh, 23 November 2024 – Maybank Cambodia, in partnership with the USAID-funded Feed the Future Cambodia Harvest III project, is proud to announce the launch of the SME Export Finance Solution, providing tailored SME and trade financing options to empower Cambodian SME exporters to the global market. This programme also includes the Credit Guarantee Scheme and the Building Capacity & Capability (BCC) programme for SMEs, developed in collaboration between Maybank Cambodia and the Credit Guarantee Corporation of Cambodia (CGCC).

This partnership aims to elevate the competitiveness of local SMEs on the global stage, fostering sustainable growth and strengthening Cambodia’s presence in international markets. By offering tailored financial products—such as working capital loans, trade finance, competitive FX in 21 currencies, remittance solutions, and export credit facilities—the initiative equips SMEs with essential resources to overcome financial barriers and pursue international growth. This marks a transformative milestone for Cambodian SMEs, providing a pathway to expand operations, increase revenue, and secure their place in the global marketplace.

Mr. Rath Sophoan, Chief Executive Officer and Country Head of Maybank Cambodia, commented on the partnership, stating, “The SME Export Finance Solution is a game-changer for Cambodian businesses aiming for expanding exports to existing and or new international markets. By empowering SMEs to overcome traditional barriers to finance, this partnership advances individual business growth while contributing to the broader economic development of Cambodia.”

“SMEs are the backbone of the Cambodian economy, and by equipping them to succeed in export markets, this collaboration will fuel job creation, foster sustainable economic growth, and strengthen Cambodia’s position as a competitive player in the ASEAN region and beyond. This initiative also reinforces Maybank’s commitment to its role as the Best ASEAN bank in Cambodia, leading the way in regional economic empowerment,” he added.

Aligned with the objectives of Feed the Future Cambodia Harvest III —a five-year USAID-funded Activity focused on fostering inclusive and sustainable growth in Cambodia’s agriculture and SME sectors—this collaboration supports diversification, resilience, and competitiveness among Cambodian SMEs. By engaging private-sector partners and key stakeholders, the project aims to strengthen SMEs’ capacity to contribute meaningfully to Cambodia’s economic development and ultimately improve livelihoods for Cambodians.

Mr. Nimish Jhaveri, Chief of Party of Feed the Future Cambodia Harvest III, remarked, “With this new trade financing solution, we can provide SMEs with the necessary capital to manage production costs, invest in quality improvements, and fulfill international orders. An effective trade financing solution is crucial for these enterprises, as it not only helps bridge cash flow gaps but also enables them to compete more effectively by facilitating timely deliveries and expanding their market reach. Together, we ensure that these enterprises are equipped not only with financial resources but also with the knowledge and expertise required to succeed globally. This partnership plays a pivotal role in enhancing Cambodia’s export potential and advancing the country’s sustainable economic growth.”

In conjunction with the SME Export Finance Solution, Maybank Cambodia, CGCC, and Harvest III also announce ‘SME Building Capacity & Capability (BCC) Programme 2024 & 2025’, a flagship initiative designed to further equip SMEs with essential business skills and knowledge. Since its inception in 2021, the BCC Programme has provided hundreds of SMEs with training on business fundamentals, advanced techniques, and modern technologies. Building on this success, in 2024 the programme will deliver specialized sessions on trade finance solutions, financial management, and strategic planning, led by industry experts from accounting & business, consulting, and finance sectors. This training empowers SMEs with practical insights and skills needed to enhance their operations and optimize their growth potential.

Mr. No Lida, Chief Executive Officer of CGCC, expressed his strong support, stating, “The BCC Programme equips our SMEs with essential skills and knowledge, empowering them to access finance and expand their businesses. Through this initiative, we can help improve financial literacy and lay the groundwork for SMEs to thrive both locally and internationally. This programme is a crucial step toward our shared vision of fostering a resilient and dynamic SME sector that significantly contributes to Cambodia’s economic growth. Furthermore, the initiative is strengthened by CGCC’s Credit Guarantee Scheme, which addresses one of the biggest challenges faced by SMEs: insufficient collateral. By easing collateral requirements, we expand financing options, allowing SMEs to access the capital they need for sustainable growth.”

Together, Maybank Cambodia, Harvest III, and CGCC are building a robust ecosystem of support for Cambodian SMEs, positioning them to thrive in both domestic and global markets. Through the combined power of financial solutions, capacity-building programmes, and reduced collateral requirements through credit guarantee, this initiative provides SMEs with the resources, knowledge, and confidence to scale their businesses and pursue international opportunities.

This strategic alliance demonstrates a shared commitment to building a resilient, inclusive, and globally connected SME in Cambodia. Maybank Cambodia, CGCC, and Harvest III are paving the way for a future where Cambodian businesses are equipped to contribute significantly to the national economy while enhancing the country’s presence on the global stage.

CGCC Participated in the 36th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Nepal

Posted on by Sorn Chhorvyvatey

From 20 to 25 September 2024, CGCC delegation led by H.E Dr. Mey Vann, Secretary of State of the Ministry of Economy and Finance and Chairman of the CGCC Risk Management Committee attended the 36th Asian Credit Supplementation Institution Confederation (ACSIC) in Kathmandu, Nepal, organized by the Deposit and Credit Guarantee Fund of Nepal under the theme “Financing Innovations for Economic Growth”.

Through this conference, HE Dr. Mey Van was invited to deliver a speech of interest after the official announcement of CGCC being the ACSIC member from 2024 onwards, thanking all ACSIC members for their support and welcoming CGCC as an official member and expressing the commitment for Cambodia to hosting the ACSIC Training Program for 2026.

Moreover, Mr. No Lida, CEO of CGCC, was also invited as a keynote speaker to share about CGCC’s credit guarantee and bond guarantee, especially to support small and medium enterprises through priority work on green financing projects. In addition, Mr. No Lida shared about the CGCC Capacity Building Program, which aims to support businesses, the involvement of credit guarantee mechanisms to increase employment opportunities, address climate change and gender equality, and consider financing solutions, sustainability and innovation through learning from good experiences from the member countries.

Through this conference, delegations from ACSIC member countries / observers presented on the progress of their respective credit guarantee schemes, as well as discussions on key topics such as financial innovation mechanisms, institutional risk management, credit guarantee, the use of digital systems (AI) and sustainable development.

The 36th ACSIC Conference was attended by more than 100 representatives of ACSIC members and relevant institutions such as the World Bank, the Central Bank of Nepal. It should also be noted that ACSIC is the largest association of credit guarantee institutions or similar institutions in Asia, established in 1987 to promote the development of credit guarantee systems for small and medium enterprises through information sharing, consulting and capacity building between the member institutions.

 

Outgoing CEO Reflects on Remarkable Changes Introduced to CGCC

Posted on by Sorn Chhorvyvatey

Starting out as a government organisation that wanted to support SMEs in Cambodia during the pandemic, the Credit Guarantee Corporation of Cambodia (CGCC) has grown from credit guarantees to green financing and bond guarantees under the leadership of its CEO Wong Keet Loong. He’s been with CGCC since its inception to set up the company in October 2020. Today, CGCC has guaranteed an impressive $230 million in credit in 2,800 guarantees. Wong, of course, is no newbie to the world of credit given his prior experience working for the Credit Guarantee Corporation (CGC) of Malaysia. With 25 years of experience in banking, he’s a global expert on finance with stints in countries like Sri Lanka, Zimbabwe, among others. A certified chartered account, Wong has been a member of the Association of Chartered Certified Accountants (ACCA) since 1994.

The Credit Guarantee Corporation of Cambodia (CGCC) today has become a vital cog in Cambodia’s economy. Starting in the middle of Covid-19, the state-owned company’s guarantees provided a buffer of safety for many banks and financial institutions to continue lending to the country’s economy.

Wong Keet Loong – who earlier worked with the Credit Guarantee Corporation of Malaysia – was with the founding team of CGCC to start the enterprise from scratch. As the first CEO of CGCC, Wong has certainly left a towering legacy for the industry. Ministry officials, who spoke to Khmer Times, hailed the role he’s played in steering CGCC.

In an exclusive interview with Khmer Times, Wong says he also had the guidance of Ros Seilava, Secretary of State, Ministry of Economy and Finance and Chairman of CGCC, among other officials to help him navigate his new role.

CGCC’s journey started in July 2020 at the policy level and Wong was brought in – in an official capacity in October 2020. In the next nine months, Ministry officials set about creating a policy framework and guidelines for operations. “By March 2021, we launched our first credit guarantee scheme,” says Wong.

“When we started, our vision was clear: to establish the first credit guarantee institution in Cambodia. I am proud to say that we turned that vision into reality, laying the groundwork for a financial landscape that would support SMEs across the nation,” said Wong, adding, “CGCC was incorporated on November 3, 2020, and we started operations after four months when we launched our first Business Recovery Guarantee Scheme (BRGS).”

While 2021 had a slow start as CGCC tried to bring awareness to market participants on the need for credit guarantees, by 2022 the pace of its loan guarantees picked up. “In 2021, we guaranteed loans amounting to $21.3 million for 194 accounts. By 2022, we’d accelerated and guaranteed loans amounting to $71.4 million to 791 businesses,” said Wong, adding, “We maintained this pace in 2023 and guaranteed $72 million in loan amount for 943 accounts.” In total, CGCC guaranteed loans amounting to $164 million to 1,928 micro, small and medium enterprises (MSMEs) as of June 2024.

Today CGCC’s efforts have resulted in the approval of 2,800 guarantees, amounting to an impressive $230 million across all provinces. “A credit guarantee mechanism was much needed in the country. Today, as we enter our fourth year of operation, CGCC has proven to be a vehicle for sustainable financing of MSMEs,” said Wong.

In Cambodia, SMEs represent 70 percent of employment opportunities and contribute 58 percent to the country’s GDP. These SMEs are from diverse fields like agriculture, industry and services.

“But, the government noticed that there was a credit gap. Many were unable to get bank loans, so the government to address this problem created CGCC,” said Wong.

Some of the common hurdles SMEs face to accessing credit is their lack of credible financial records like credit scores and collateral. “They are also impacted by lack of financial literacy and good corporate governance models. But with CGCC backing them, deserving SMEs can now get much-needed credit to expand their business or get fresh capital for new ventures,” said Wong.

Looking at the portfolio of businesses that CGCC guarantees as high as 50 percent were SMEs in services and trade, 3 percent from agriculture, 7 percent from industry with miscellaneous other SMEs formed the remaining 40 percent.

CGCC has also played a vital role in job creation. In 2021, CGCC was instrumental in creating 4,671 jobs among SMEs. This number quadrupled in 2022 to 19,921 and by 2023 went up 40 percent to 28,148 jobs. “In total, CGCC has been instrumental in creating more than 52,740 jobs in Cambodia,” said Wong.

This year, CGCC also launched an “entrepreneurship programme initiative” to promote entrepreneurship and financial literacy among SME owners. In 2023, we reached another remarkable milestone by becoming the first Bond Guarantee institution in Cambodia. As part of that initiative, earlier this month, CGCC signed an MoU with the Securities and Exchange Regulator of Cambodia (SERC) to support Cambodia’s securities market by diversifying credit guarantee services to bond guarantees. It also signed an MoU last month with GuarantCo to provide guarantees for local bonds, an international guarantee company funded by several European countries namely the UK, the Netherlands and Switzerland to provide additional bond guarantee capacity and technical assistance to CGCC.

“A guarantee from us will be reassuring for institutional investors and the public – as CGCC has got a local credit rating of khAAA. It would also be reassuring to prospective bond investors that our partner GuarantCo is a Fitch “stable” and “AA” rated entity,” Wong said. “This achievement marks our support towards all segments of SMEs including larger SMEs by raising bonds guaranteed by CGCC.”

“Our vision has expanded now and we’ve also set up a Sustainable Green Financing Facility and this bond guarantee scheme for which we hope we’ll have a valuable partner in SERC, CSX and partners like GuarantCo,” said Wong.

Ros Seilava, Secretary of State, Ministry of Economy and Finance and Chairman of CGCC, in an earlier interaction, said, “CGCC’s guarantees will promote innovative financing and financial products which will support economic diversification and improve Cambodia’s competitiveness in line with the Pentagonal Strategy-Phase 1 for Growth, Employment, Equity, Efficiency and Sustainability of the Royal Government of Cambodia of the Seventh Legislature of the National Assembly.”

Wong said, he finds it “hard to believe that it has been four years since I first arrived in Cambodia during the Covid lockdowns and reported to work at the Ministry on October 1, 2020. I can still remember those days when it was much quieter and less traffic. It has been an incredible journey together, and what a journey it has been for me!”

In 2020, CGCC launched its first scheme the Business Recovery Guarantee Scheme (BRGS). Today it has as many as five individual guarantee schemes eg. Women’s Entrepreneur Scheme, Co-Financing Guarantee Scheme to support SME Bank’s Co-Financing Scheme and Post-Harvest Fisheries Guarantee Scheme.

“We also launched the Portfolio Guarantee Scheme specially tailored for specific FIs and notably the Rice Export Guarantee Scheme to support the rice exports of 1 million tonnes in 2025. Our current launch of the Sustainable Green Financing Facility (SGFF), our blended financing facility to support Green financing, a facility targeted to promote green technology in addressing climate change.

These guarantee schemes position CGCC to play a vital role in empowering entrepreneurs and developing various sectors,” said Wong.

Wong also said over the years, CGCC has forged strong partnerships with 27 Participating Financial Institutions (PFIs), collaborating to create a robust ecosystem that supports our SMEs.

“I am also pleased to share that CGCC has recorded good financial performance with its total equity increasing from $200 million to $235 million with a growth of 15 percent. With the increase in our equity, it increases our guarantee capacity and sustainability,” said Wong, adding, “This growth is a testament to the hard work, dedication, and unwavering support from every staff member of CGCC and the Ministry.”

Wong said that he is grateful to CGCC’s Chairman, Board of Directors and all our stakeholders and partners ie. development partners eg. World Bank, ADB, UNDP, UNIDO, financial institutions and SME associations. “It has been a privilege to work alongside such dedicated partners and stakeholders who share our vision for a vibrant and inclusive economy. Your collaboration, insights and unwavering support have been the backbone of CGCC’s achievements. I urge you all to continue this journey with us, to keep supporting CGCC as we strive to empower even more SMEs and enhance financial inclusion across Cambodia,” he said.

Wth the new CGCC CEO No Lida all set to take over, Wong said, “I wish CGCC continued success in playing a critical role in developing our SMEs. Together, we can build a brighter future for our entrepreneurs and our economy.”

 

Credit to: Khmer Times, Published on 30 September 2024

 

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 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.

 

 

The Signing of Memorandum of Understanding between The Securities and Exchange Regulator of Cambodia and Credit Guarantee Corporation of Cambodia on Collaboration in Promoting the Development and the Issuance of Guaranteed Bonds and Workshop on “Benefits and Opportunities of Issuing Guaranteed Bonds in Cambodia”

Posted on by Sorn Chhorvyvatey

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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.

 

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