Tag: Financing

Phnom Penh, 24^th January 2022 – Today, the Credit Guarantee Corporation of Cambodia Plc. (CGCC) entered into a Memorandum of Understanding (MoU) with the Biogas Technology and Information Center (BTIC) which was jointly established by the Royal University of Agriculture (RUA) and the United Nations Industrial Development Organization (UNIDO) through the project “Reduction of Greenhouse gas emission through Promotion of Commercial Biogas Plants”, funded by the Global Environment Facility (GEF) – as a key project for UNIDO’s ongoing Programme for Country Partnership in Cambodia. This cooperative partnership aims to promote investments in commercial biogas technologies in Cambodia.

Under the framework of the MOU, the two parties have agreed on the objective to jointly identify opportunities for collaborative activities and programs to assist biogas technology and investment through appropriate risk-sharing facilities and to take forward identified collaborative opportunities in bridging knowledge gaps of the biogas value chain among partners and relevant stakeholders. This initiative will support and enable access to financial resources for commercial biogas technology investment for the interested investors or promoters. With such enabling investment environment, it will foster the adoption and implementation of commercial biogas technologies in the livestock sector and agro-processing industry which will provide great potential for the sectors in harnessing wastes to energy and in complying with bio-security systems, sanitation, and environmental safeguards (such as preventing odor and water pollution). Such cooperation will enable farmers, rural communities, and agribusinesses to improve their livelihoods and increase business profitability in a good and sustainable manner.

On behalf of CGCC, Mr. Wong Keet Loong, Chief Executive Officer expressed “This MoU signing with BTIC is a step towards CGCC’s Environmental, Social and Governance (ESG) strategies to support the growth of the agriculture sector which is one of the key priority sectors in Cambodia.  This sector is the main source of local employment and income in rural areas. As the agriculture sector is the 2nd largest source of greenhouse gas (GHG) emissions, it will cause climate changes such as extended monsoon rainfalls and higher temperatures will have negative effects on this sector. Thus, the importance of reducing climate change is critical for the sustainability of the agro-processing and livestock industry.”

CGCC intends to work with FIs who are supportive of providing Green Financing to support the commercial biogas technologies to assist in reducing GHG emissions.  With the technical expertise and support from BTIC in biogas technology, CGCC has a strong commitment to working together with other stakeholders to promote access to financing clean energy. As part of our ESG, the development of biodigester in the agriculture sector would contribute toward 8 SDG goals e.g. SDG 1 (End Poverty), SDG 2 (Zero Hunger), SDG 3 (Good health & well-being), SDG 5 (Gender equality), SDG 7 (Affordable & Clean Energy), SDG 8 (Decent work & economic growth), SDG 13 (Climate Action) and SDG 15 (Life on Earth), Mr. Wong added.

“In addition to our strategic partnership with a commercial bank, we are honored to have the opportunity to collaborate closely with CGCC, a financial guarantee institution governed by the government, to provide an innovative financing solution to support the adoption of biogas technology for agribusinesses,” said Mr. Lor Lytour, Director of BTIC. He elaborated further: “The MOU will enable all key actors, including BTIC, CGCC, and its bank partners as well as other stakeholders to work together closely and more effectively on a number of key priorities in order to deliver the response to the needs of Cambodia agribusiness in up taking this biogas technology which is proven as an effective and integrated waste management solution.” “We believe this partnership will foster the long-term growth in commercial animal production and agro-processing by promoting alternative and renewable energy and proper waste management while contributing to the Government’s commitment to combating climate change,” he continued.

Mr. Narin Sok, UNIDO’s Country Representative, indicated the importance of this strategic partnership as an integral part of ongoing efforts in developing a conducive investment environment to address the financial constraints faced by the investors in investing in commercial biogas projects. He said: “I am pleased that CGCC is proactively demonstrating that our financial sector is willing to learn, adapt and step outside of their traditional roles. Innovation in financing mechanisms means a lot to many development efforts. It will foster further investments in the commercial biogas in agribusiness, which is a significant breakthrough for the investors to adopt and implement renewable energy technologies into their business practices.  Investment in this type of clean energy will generate a great potential for economic, environmental, and social benefits to the users, farm owners, investors, and society. This MoU is aligned with the Ministry of Agriculture, Forestry, and Fisheries’ efforts to update the biogas policy for the period 2021-2030, as well as with many of the objectives set by the Government in UNIDO’s PCP, in the fields of sustainable energy and circular economy promotion.”

Note:

1. The Credit Guarantee Corporation of Cambodia Plc. (CGCC) is a state-owned enterprise operated under the technical and financial guidance of the Ministry of Economy and Finance (MEF). CGCC was incorporated on 03 November 2020 and has been receiving technical support from ADB, WB, and UNCDF. CGCC’s mission is to provide credit guarantees to lenders on loans made to businesses based on international standards to share the risk with lenders and to improve financial inclusion. CGCC launched the first guarantee scheme on 29th March 2021. For more information, please visit www.cgcc.com.kh
2. The BTIC Cambodia, a repository of commercial biogas technology and information center, was established jointly by the United Nations Industrial Development Organization (UNIDO) and the Royal University of Agriculture (RUA). The center is co-funded by the project entitled “Reduction of Greenhouse gas emission through Promotion of Commercial Biogas Plants” and RUA. The center was officially launched on 8^th December 2016 and is being hosted by the Faculty of Agricultural Engineering at the RUA in Cambodia. For more information, please visit www.btic-rua.org
3. The United Nations Industrial Development Organization (UNIDO) is a specialized agency of the United Nations that focuses its efforts on relieving poverty by fostering productivity growth. It helps developing countries and countries with economies in transition in their fight against marginalization in today’s globalized world. In December 2020, UNIDO jointly launched a Programme for Country Partnership (PCP 2020-2023), which was jointly developed with the Royal Government of Cambodia (RGC) as an innovative platform for mobilizing blended financing for achieving Inclusive and Sustainable Industrial Development (ISID). To support the achievement of the SDGs and of the development priorities set by the Government, the PCP prioritizes two main components, namely (i) Agro Value Chain Development and (ii) Industrial Diversification, Innovation and development of Special Economic Zones (SEZs). The two main components will be supported through five crosscutting components: industrial policy and statistics, quality infrastructure, sustainable energy, circular economy, and women empowerment and youth employment. For more information, please visit www.unido.org

On 19 January 2022, CGCC held the 3rd Executive Committee (EXCO) meeting. The meeting aims to discuss the strategic business plan 2022, and review the progress and action plans 2022 of each department. The meeting was attended by the CEO, DCEO, and all department heads of CGCC.

The agenda of this 3^rd Exco Meeting included (1) IT Policy, (2) Demo on Ms. Team’s Approval Function, (3) Amendment to Guidelines on Employees Compensation, Benefits, and Entitlements, (4) Financial Performance Report, (5) Monthly Risk Management Report, and (6) Action Plan 2022 of each department.

The Exco meeting of CGCC is regularly organized monthly to review the monthly progress of CGCC and discuss the future direction of CGCC.

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Credit Guarantee Corporation of Cambodia (CGCC) and Chip Mong Bank Plc. officially announce the partnership in the signing ceremony on Credit Guarantee Agreement on January 13, 2022 at Chip Mong Bak Touk Center, to provide guaranteed loans to businesses especially SMEs who lack of collaterals for their businesses’ working capital and investment.

Mr. John Bell, President of Chip Mong Bank said “Chip Mong Bank has always been committed to supporting businesses and small and medium enterprises (SMEs) in Cambodia by providing a wide range of loans with low interest rates and long-term repayments. In addition, Chip Mong Bank always welcomes any cooperation from all stakeholders in order to help develop businesses and SMEs to be stronger and more sustainable.” 

He added: “The current agreement between Chip Mong Bank and the Credit Guarantee Corporation of Cambodia will help Chip Mong Bank customers to be more likely to get a loan even if they do not have enough collateral. This collaboration is very beneficial for customers, the bank as well as the national economy, as SMEs business owners who are in need of financial assistance can apply for a bank loan with better terms and larger number of loans under the guarantee from CGCC.”  

Mr. Wong Keet Loong, CEO of CGCC said that: “CGCC is delighted to sign our 1st partnership agreement for 2022 with Chip Mong Bank.  This partnership will make up a total of 22 participating FIs for CGCC to provide guaranteed loans to SMEs. 

He added : “As business activities improve, the demand for loans for working capital or business expansion will increase.  The credit guarantee will be beneficial to support the collateral required for business owners when they apply for their loans.  We are optimistic that more SMEs or businesses will benefit from the guaranteed loans.” 

The partnership agreement between CGCC and Chip Mong Bank will be the key supports to facilitate the business owners, including SMEs, who are financially viable and are in need of loans for business development, but now lack collateral. You can apply for a loan from Chip Mong Bank with confidence. 

About CGCC 

CGCC is a state-owned enterprise operated under the technical and financial guidance of the Ministry of Economy and Finance (MEF), and officially incorporated in November 2020. ​CGCC’s mission is to provide credit guarantees to lenders on loans made to businesses based on international standards to share the risk with lenders and to improve financial inclusion. 

As of 11 January 2022, CGCC has supported 199 businesses by providing credit guarantee for their loan applications, amounting to more than USD 22 million. In term of type of borrowers, CGCC has provided the most to SMEs, which is accounted for 95% of the total businesses receiving the credit guarantee from CGCC. 

About Chip Mong Bank 

Chip Mong Bank is a digital commercial bank established in January 2019 and has a strong shareholding from Chip Mong Group. In the more than three years of operation, Chip Mong Bank has total assets of more than USD 800 million, of which total loans have increased by more than USD 500 million and received deposits more than USD 700 million. 

Credit Guarantee Corporation of Cambodia (CGCC) organized a virtual seminar on “Credit Guarantee – Benefits & Opportunities to Support Small and Medium (SME) Development” on 16 December 2021, with support from the Ministry of Economy and Finance, Asian Development Bank (ADB), and the United Nations Capital Development Fund (UNCDF). The seminar brings together relevant stakeholders including the Government, Development Partners, Financial Institutions, and business representatives to discuss the benefits and opportunities of using credit guarantees to support business survival and expansion.

The extent to which credit guarantees can contribute to restoring the economy depends on the lenders’ and borrowers’ perspectives toward credit guarantees. The seminar, therefore, focuses the discussion on their perspectives toward credit guarantees. All speakers shared a common view that lack of collateral is one of the main challenges for businesses to access formal loans. They agreed that credit guarantees can support banks and Micro-Finance Institution (MFIs) to lend out more to businesses, especially those who lack collateral.

The seminar also digs into stakeholders’ ongoing efforts to improve SME access to finance for the economic re-opening in Cambodia. The Government has introduced many policy interventions to support SME access to finance. In addition, relevant stakeholders have spared​ efforts which include, among others, increasing financial literacy, introducing innovative financial solutions, and upgrading financial sector infrastructure. The panelists demonstrated their commitment to continue supporting SMEs’ access to financial services.

Prominent speakers in this seminar include the President of Federation of Associations of SMEs of Cambodia (FASMEC), Vice President of Cambodia Women Entrepreneurs Association (CWEA), President of Young Entrepreneurs Association of Cambodia (YEAC), Chairman of Cambodia Microfinance Association & CEO of AMK Microfinance, CEO of Canadia Bank, Deputy Director General of General Department of Policy of Ministry of Economy and Finance, and Senior Financial Sector Specialist from the ADB, and Senior Regional Technical Advisor from UNCDF, and CGCC’s management. This seminar attracted more than 300 participants from various institutions – Government, development partners, financial institutions, and business communities.

CGCC is a state-owned enterprise under the financial and technical guidance of the Ministry of Economy and Finance. CGCC’s mission is to provide credit guarantees to lenders on loans made to businesses. As of 10 December 2021, CGCC has provided guarantees for 173 loans with a total amount of over USD 20 million.

On 10 December 2021, the 7th Board of Directors Meeting of Credit Guarantee Corporation of Cambodia (CGCC) was organized virtually, in the presence of H.E. Ros Seilava, Secretary of State of the Ministry of Economy and Finance, and the chairman of the CGCC’s Board of Directors, along with the presence of other 6 Board of Directors members.

The agenda of this 7th Board of Directors Meeting included: (1) CGCC progress report, (2) 4th Batch PFI applications, (3) Investment plan, (4) Risk management framework and risk appetite framework, (5) Amendment of credit guarantee system implementation agreement, (6) Procurement plan for 2022 of CGCC, (7) other matters.

CGCC’s Board of Directors Meeting is regularly organized to review, evaluate, and seek recommendations and decisions on CGCC’s activities and progress, especially the credit guarantee schemes of CGCC, in order to ensure transparency and efficiency.

On 06 December 2021, Mr. No Lida, Deputy CEO of CGCC, has attended as a panelist in the workshop on “Access to Finance for SMEs and Women Entrepreneurs-Challenges and Solutions” organized virtually by the Association of Banks in Cambodia (ABC), the Cambodia Microfinance Association (CMA), and PACT Cambodia.  

 This workshop aims to engage and build the bridge between stakeholders (banking and financial institutions, small and medium enterprises—SMEs, Women Entrepreneurs, government and development partners) to address the challenges of SMEs and women entrepreneurs in accessing finance and discuss the solutions for this issue. 

Mr. Lida has shared the roles of CGCC and the ongoing practical experiences/perspectives in response to the panel discussion topic on “Promote and raise awareness on how to apply for a loan for business”. The discussion also participated by related financial institutions to share comments, and recommendations for SMEs and women entrepreneurs to expand their understanding of access to finance. 

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CGCC’s CEO, Mr. Wong Keet Loong, on 26 November 2021, attended the Annual Micro Finance Conference 2021 via online, within the topic of Microfinance Sector Resilience and Economic Recovery amid the COVID-19 Pandemic: “Challenges and Opportunities”, and also participated as a panelist in the panel discussion within the topic of “Key Reflection of Covid-19 response and future perspective to accelerate the economic recovery”.   

This event was organized by Cambodia Microfinance Association (CMA) with participation from related stakeholders such as government institutions, development agencies, especially the financial institutions including banks and Microfinance.  

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