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Tag: Micro-Finance

State-run CGCC graded khAAA, making way for bond market expansion

Posted on by Sorn Chhorvyvatey

The state-owned Credit Guarantee Corporation of Cambodia (CGCC) has been rated khAAA by the Rating Agency of Cambodia (RAC), after its accreditation by the Securities and Exchange Regulator of Cambodia (SERC), making it the first debt securities guarantee institution in the country, enabling it to support local companies in issuing bonds.

The initiative aims to increase the liquidity of the Khmer riel through the issuance of financial instruments and enhance the credit rating of corporate bonds.

The move is part of a broader strategy to stimulate the sector’s development by fostering greater market confidence.

Wong Keet Loong, CEO of CGCC, said the khAAA rating enables them to assist small and medium-sized enterprises (SMEs) in need of additional funds through debt securities issuance in the capital market.

“The rating demonstrates the CGCC’s financial capacity to assist larger SMEs capable of issuing bonds to secure funding for their business expansion. CGCC remains instrumental in fostering economic development and in strengthening the trust and confidence of our partners,” he said.

SERC director-general Sou Socheat confirmed that the corporation’s rating allows it to aid other companies in issuing bonds on the Cambodia Securities Exchange (CSX).

“CGCC is a guarantor in the Cambodian bond market and its rating indicates the company’s soundness. Moreover, CGCC’s rating starts the culture of rating in the market, building public confidence and showcasing the company’s commitment and willingness to actively engage in our bond market,” he explained.

The corporation formulated a policy framework on bond guarantee and received endorsement from the Ministry of Economy and Finance on May 17, 2023.

On August 22, SERC accredited CGCC as a bond issuance guarantor, supporting local companies and aiding the growth of the Kingdom’s securities sector.

Established under sub-decree No 140/ANKR/BK on September 1, 2020, the corporation launched its $200 million Business Recovery Guarantee Scheme (BRGS) on March 29, 2021 in a bid to broaden access to formal loans from participating financial institutions (PFIs) for working capital, investment and business expansion purposes, according to CGCC.

As of December 22, the corporation’s outstanding loans amounted to $113.96 million, with a non-performing loan (NPL) ratio of 5.41. Total claim payouts stood at $123,336.

The corporation has supported 1,731 micro, small and medium enterprises (MSMEs) along with 149 larger firms, as per CGCC.

Credit to: The Phnom Penh Post, Published on 22 January 2024

CGCC rated khAAA by Rating Agency of Cambodia

Posted on by Sorn Chhorvyvatey

Credit Guarantee Corporation of Cambodia (CGCC) has been rated khAAA by the Rating Agency of Cambodia (RAC), a credit rating agency accredited by the Securities and Exchange Regulator of Cambodia.

This rating indicates that CGCC has an “extremely strong capacity to meet financial commitment” with the likelihood of support from the Royal Government of Cambodia.

CGCC was recently accredited as the first Bond guarantee institution in Cambodia by the Securities and Exchange Regulator of Cambodia (SERC) to help boost the bond market development in Cambodia by building more market confidence.

After obtaining the accreditation from SERC, CGCC has applied for a credit rating from RAC. As a result, CGCC was rated khAAA with stable outlook. This will enhance the rating of the corporate bonds guaranteed by CGCC and bring more confidence for bond investors, including financial institutions and insurance companies.

Sou Socheat, delegate of the Royal Government in charge as Director General of the SERC said, “CGCC is a guarantor in Cambodia bond market and its rating indicates the soundness of the company. In addition, the rating of CGCC demonstrates and commences the culture of rating to build more confidence from public and it also shows the commitment and the willingness of the company to actively participate in our bond market.”

Wong Keet Loong, Chief Executive Officer of CGCC, said, “We are honoured to receive the khAAA rating from RAC. This rating reflects the financial capability of the company to support larger SMEs who can issue bonds to source funding to expand their business. CGCC continues to play a vital role in supporting economic development and further enhancing the trust and confidence of our partner.”

Under the policy direction from the Ministry of Economy and Finance, the CGCC has developed a “Policy Framework on Bond Guarantee” and has received the highest approval from Deputy Prime Minister, Minister of Economy and Finance, on this policy framework on May 17, 2023.

On 22 August 2023, the Securities and Exchange Regulator of Cambodia (SERC) issued an accreditation letter to CGCC as a guarantor for bond issuance to support local companies raising funds and the development of the securities sector in Cambodia.

The guarantee on bond issuance service of CGCC can provide further support to encourage bond issuances by local companies, attract investors to invest in corporate bonds, increase the liquidity of Khmer Riel from the bond issuance and improve the credit rating of corporate bonds.

CGCC is the only credit guarantee corporation in Cambodia, established by the decision of former Prime Minister 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.

Credit to: Khmer Times, Published on 22 January 2024

CGCC Issued Guarantee Letters for Loans Worth over $159M

Posted on by Sorn Chhorvyvatey

Serving as a key pillar of support for the businesses in distress across the Kingdom, the Credit Guarantee Corporation of Cambodia (CGCC) issued 1,880 letters of guarantee for loans worth $159.69 million until November 30 last year, according to the organisation’s latest factsheet.

The CGCC is the preferred credit guarantee institution in Cambodia set up to improve financial inclusion and develop the growth of SMEs. Established in November 2020 with a state budget of $200 million, its mission has been to provide credit guarantees to lenders on loans made to businesses based on international standards alongside sharing the risk with lenders and improving financial inclusion.

Through its various initiatives and programmes, the organisation has extended its support to over 1,700 micro, small and medium enterprises (MSMEs) and more than 150 larger firms, and contributed towards fostering employment and income opportunities. Studies reveal CGCC initiatives have directly contributed towards financial inclusion as well as poverty reduction.

The CGCC scheme involves 27 participating financial institutions (PFIs), which extend credit as working capital investment and business expansion to SMEs.

As per the CGCC factsheet, the outstanding guaranteed loan stood at $113.96 million while the outstanding guaranteed amount was $82.12 million. The Non-Performing Loan (NPL) ratio of the outstanding guaranteed amount remained at 5.41 percent and the claim payout stood at $123,336.

The organisation’s spectrum of activities was widened when the Securities and Exchange Regulator of Cambodia (SERC) under the Non-Bank Financial Services Authority of the Ministry of Economy and Finance accredited the CGCC as the country’s first guarantor for bond issuance to support local companies in raising funds last October.

The SERC issued a formal letter to accredit CGCC as Cambodia’s first bond issuance guarantor on August 22, 2023, which according to experts, will play an important role in the development of the securities sector in the country.

The CGCC has developed a policy framework on bond guarantee that was approved by the Deputy Prime Minister and Minister of Economy and Finance Aun Pornmoniroth on May 17, 2023, in response to the sustainable development of Cambodia’s financial market through the company’s delivering guarantee on bond issuance services to corporations to raise funds for business development.

“The guarantee on bond issuance service can provide further support to encourage bond issuance by local companies, attract investors to invest in corporate bonds, increase the liquidity of riel from the bond issuance and improve the credit rating of corporate bonds, in which response to the sustainable development of the financial market,” a SERC statement said.

The organisation has been receiving technical support from the Asian Development Bank (ADB), World Bank, and UN Capital Development Fund (UNCDF) ever since it launched the first guarantee scheme on 29 March 2021.

Te Taing Por, President of the Federation of Association for Small and Medium Enterprises of Cambodia (FASMEC), earlier told Khmer Times that the CGCC guarantee ensures easy credit for SMEs and a bigger market for their products.

“Credit guarantee from the Credit Guarantee Corporation of Cambodia is an opportunity for small and medium-sized enterprises, members of FASMEC, who are facing a lack of collateral to access financing to expand their business,” Taing Por had said.

The CGCC has also been providing support to SMEs on capacity building, consulting, technical and information backup under the credit guarantee framework.

Credit to: Khmer Times, Published on 01 January 2024

A cooperative business linkage event on “Strengthening and Extending the Agricultural Products through Contract Farming Implementation”

Posted on by Sorn Chhorvyvatey

On December 28, 2023, Ms. Pin Manika, Manager of Marketing and Business Development, represented Credit Guarantee Corporation of Cambodia (CGCC), was invited to attend a cooperative business linkage event on “Strengthening and Extending the Agricultural Products through Contract Farming Implementation,” organized by Cambodian Agricultural Cooperative Alliance (CACA)” presided over by representative of the Ministry of Agriculture, Forestry, and Fisheries and the Cambodian Agricultural Cooperative Alliance. The agricultural community leaders, rural community representatives, representatives from state institutions, development counterparties, and private institutions, with approximately 230 attendees, attended.

The forum is organized to create collective dialogues with private sector institutions, manufacturers (Agricultural Community), development partners and relevant organizations to find out progress, challenges, and solutions, especially continuity together efforts in partnership between governments, agricultural communities, private sectors, development partners and institutions involved to support the strengthening and expanding agricultural products market more efficiently and energetically.

On that occasion, Ms. Pin Manika also presented the CGCC’s credit guarantee schemes and 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, especially to the business owners who are in the agriculture sector.

$150M in Loans Guaranteed for SMEs by CGCC

Posted on by Sorn Chhorvyvatey

As of November 30, the state-owned Credit Guarantee Corporation of Cambodia Plc (CGCC) has issued a total of 1,880 Letters of Guarantee (LG) for loans worth $159.69 million. The guarantees were in support of small- and medium-sized enterprises (SMEs) affected by the Covid-19 pandemic.

According to figures released on December 22, the total of outstanding loans equal $113.96 million, with a non-performing loan (NPL) ratio of 5.41. Total claim payouts came to $123,336. The businesses supported included 1,731 micro, small and medium enterprises (MSMEs), and 149 larger firms.

Mey Vann, secretary of state at the Ministry of Economy and Finance, recently explained that SMEs have played an important role in supporting Cambodia’s socio-economic development. They contributed to the reduction of poverty by 50.2 per cent in 2003 to just 17.8 per cent in 2020, by increasing employment and income for Cambodians.

He said the CGCC was established to share risks with financial institutions, in order to increase the accessibility of loans to businesses, especially SMEs.

“The government considers that the use of the state budget to support financing through the credit guarantee mechanism has the first major advantage of a ‘Leverage Effect’. By using the capital of the CGCC to secure rotating loans, the capital is used only when a secured loan is lost. The state budget of $200 million provided by the CGCC supports the issuance of loans with a far greater value,” he said.

“Second, it serves as a ‘Countercyclical Crisis Tool’ by maintaining market confidence, especially during a crisis, to balance economic activity,” he added.

Toch Chaochek, CEO of Cambodia Post Bank Plc (CPBank), a CGCC partner, explained that SMEs which are correctly registered and seek loans with the assistance of the CGCC are less risky creditors than their counterparts that do neither.

The National Bank of Cambodia expressed support for lending to smaller businesses, noting that the benchmark risk weight was reduced to 75 per cent for properly registered SMEs that could produce appropriate financial statements.

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.

In early January, the finance ministry announced the ongoing BRGS to MSMEs, as well as large enterprises. The project will continue until the initial capital of $200 million is gone.

Credit to: The Phnom Penh Post, Published on 25 December 2023

The Business Owner Who Received a Loan Guaranteed by CGCC

Posted on by Sorn Chhorvyvatey

Agriculture is one of the key sectors in supporting Cambodia’s economic growth. Seeing the potential to promote Cambodian products and support Cambodian farmers, I decided to start a Cambodia Safety Vegetable Union of Agricultural Cooperative in 2021.

When starting this business, my main challenge was the lack of human resources to prepare documents and handle administrative work since most of the community union members were farmers. Another major challenge was the lack of working capital to expand the business and product exports. The solution for me was a loan from a financial institution.

At first, because my collateral was not enough for the loan, I could not obtain the necessary loans to support my business. However, later with a guarantee from CGCC, I was able to receive a sufficient business loan from Chamroeun Microfinance Institution. I used the guaranteed loan as a working capital, which allowed me to grow my Cambodia Safety Vegetable business to serve my customers and distributors in many provinces and cities on time. I also gained the trust of various development partners on my business.

Obtaining a guaranteed loan from CGCC depends on the potential of my business, namely the possibility of growth, building a good credit history, as well as completing the required documents that can confirm the need to use a loan for my business. Other business owners who need capital but lack collateral can also seek credit guarantees from CGCC through CGCC partner banks or microfinance institutions.

Read more: Meet the Business Owner Who Received a Loan Guaranteed by CGCC

Understanding Guarantee Management System (GMS) of CGCC

Posted on by Sorn Chhorvyvatey

A business cannot grow to its full potential without technology. CGCC is not an exception. “Information technology and business are becoming inextricably interwoven. I don’t think anyone can talk meaningfully about one without talking about the other”, said Bill Gates, founder of Microsoft. Since the first day of its operation, CGCC has embraced information technology, starting with the basic functions of Excel spreadsheets and Microsoft SharePoint to manage credit guarantee operations. Today, CGCC hit a new milestone by launching the Guarantee Management System (GMS) to further leverage information technology for effective credit guarantee operation. Technology adoption is our commitment to play a small part in supporting the key priorities – People, Road, Water, Electricity, and Technology – of the “Pentagonal Strategy – Phase I” of the new Royal Government of Cambodia.

What is GMS?

GMS is a digital platform that automates and streamlines the credit guarantee process, making it more convenient, faster, and more secure. It is the first-ever and only digital platform to manage a credit guarantee operation in Cambodia, tailored explicitly to CGCC’s credit guarantee model. It is a web-based system developed using microservices architecture and modern technologies to improve the guarantee process’s efficiency, accuracy, and security.

How was GMS developed?

. End-to-end automation: The GMS automates the guarantee application process, from PFI’s submission to CGCC’s approval. Furthermore, auto validation of CGCC’s scheme features is integrated to reduce error and time consumption when composing and reviewing the guarantee application.

. Real-time tracking: The GMS provides real-time monitoring of the status of all guarantee applications, allowing users to stay updated on the progress of each application and request.

. Comprehensive reporting: The GMS provides comprehensive reporting on all credit guarantee activities, allowing users to track the performance of guaranteed loans and identify areas for improvement.

. High security: The GMS is hosted on a secure platform and uses the latest security technologies to protect user data.

Read more: Understanding GMS of CGCC

“CGCC Annual Staff Retreat 2023 in Siem Reap”

Posted on by Sorn Chhorvyvatey

On November 9 to 12, 2023, CGCC organized the annual staff retreat along with a training program on “Action Leadership for Growth,” as well as a team building at Siem Reap province on November 9 to 12, 2023, to strengthen productivity,​ solidarity, and appreciation to all staff’s efforts in credit guarantee development.

“CGCC Annual Staff Retreat 2023 in Siem Reap”
“CGCC Annual Staff Retreat 2023 in Siem Reap”

This annual staff retreat provided all staff with a closer understanding of each other, shared working experiences, and increased capacity building and knowledge on action leadership for the growth to improve their productivity, as well as to contribute to the development of CGCC, in line with the vision to enhance financial inclusion and develop SMEs in Cambodia too.

“CGCC Annual Staff Retreat 2023 in Siem Reap”
“CGCC Annual Staff Retreat 2023 in Siem Reap”
“CGCC Annual Staff Retreat 2023 in Siem Reap”
“CGCC Annual Staff Retreat 2023 in Siem Reap”
“CGCC Annual Staff Retreat 2023 in Siem Reap”
“CGCC Annual Staff Retreat 2023 in Siem Reap”
“CGCC Annual Staff Retreat 2023 in Siem Reap”
“CGCC Annual Staff Retreat 2023 in Siem Reap”

CGCC Provides $149M Credit Support

Posted on by Sorn Chhorvyvatey

In a bid to give a much-needed boost to micro, small and medium-sized enterprises (MSMEs), the Credit Guarantee Corporation of Cambodia (CGCC) has infused credit guarantees of as much as $149 million as of September 2023. A report issued on October 17 revealed 1,762 businesses benefited from them.

“The Credit Guarantee Corporation of Cambodia has provided guarantees for $149 million in loans for business, investment and business expansion capital to support large, micro and small businesses,” said a report.

A CGCC report put the total outstanding guaranteed loans at $111 million and outstanding guaranteed amount at $80 million. It also put the number of MSMEs at 1,617 and large entities at 145, with 741 being women-owned.

The CGCC scheme involves 27 participating financial institutions (PFIs) to extend credit as working capital investment and business expansion to SMEs.

A Ministry of Economy and Finance undertaking, CGCC was the first credit guarantee institution in the Kingdom set up in August 202 at the height of the Covid-19 pandemic.

The CGCC guarantee ensures easy credit for SMEs and a bigger market for their products, said Te Taing Por, President of the Federation of Association for Small and Medium Enterprises of Cambodia (FASMEC).

“Credit guarantee from the Credit Guarantee Corporation of Cambodia is an opportunity for small and medium-sized enterprises, members of FASMEC, who are facing a lack of collateral to access financing to expand their business,” Taing Por said.

Smooth loan distribution has boosted entrepreneurship and financial inclusion said Mey Vann, Secretary of State at the Ministry of Economy and Finance.

Credit to: Khmer Times, Published on 19 October 2023

Training on PowerPoint Designs and Presentation Skills for CGCC’s Staff

Posted on by Sorn Chhorvyvatey

On 30 August 2023, CGCC organized a training on “PowerPoint Designs and Presentation Skills” for all staff at CGCC head office.

CGCC hopes this training course will help improving the presentation skills of all CGCC staff and contributing their work performance as well as CGCC development as a whole.

Training on PowerPoint Designs and Presentation Skills for CGCC's Staff
Training on PowerPoint Designs and Presentation Skills for CGCC’s Staff
Training on PowerPoint Designs and Presentation Skills for CGCC's Staff
Training on PowerPoint Designs and Presentation Skills for CGCC’s Staff
Training on PowerPoint Designs and Presentation Skills for CGCC's Staff
Training on PowerPoint Designs and Presentation Skills for CGCC’s Staff
Training on PowerPoint Designs and Presentation Skills for CGCC's Staff
Training on PowerPoint Designs and Presentation Skills for CGCC’s Staff

Click here to read more about: CGCC Provides Guarantee Management System “GMS” Sharing and Training Sessions to Participating Financial Institutions (PFIs)