CGCC

CGCC & Cambodian Public Bank Plc. Entered into Partnership on Credit Guarantee

Cambodian Public Bank Plc. (Campu Bank) and Credit Guarantee Corporation of Cambodia (CGCC) entered into a partnership agreement on Credit Guarantee at Campu Bank Building on 24 February 2022.

The main objective of the partnership is to financially assist the Small and Medium-size Enterprises (SMEs) with easy access to funding for their business amid the COVID-19 challenges by providing working capital and capital expenditure financing which is also in line with the government’s initiative to assist SMEs to expand their business. Campu Bank will work closely with CGCC to promote guaranteed financing schemes that are offered by CGCC including the Business Recovery Guarantee Scheme (BRGS) to meet the needs and demands of the SMEs.

CGCC & Cambodian Public Bank Plc. Entered into Partnership on Credit Guarantee

At the signing ceremony, Mr. Ong Ming Teck, Chief Executive Officer of Campu Bank said, “SMEs play a crucial role towards nation-building and economic growth of Cambodia by providing employment, income, and poverty reduction in the long term. The partnership would further strengthen our inspiration to promote financial inclusion and literacy to the SMEs and Cambodians especially those with limited access to low-cost financing and banking services.

Mr. Ong added that “the signing of the partnership is timely as Campu Bank is celebrating its 30th anniversary this year and more new products and services, and digital initiatives will be rolled out to benefit our customers as part of its celebration to mark our strong presence in Cambodia. We are confident of playing an instrumental role towards nation-building and providing financial access to the SMEs at all our 31 branches.”

CGCC & Cambodian Public Bank Plc. Entered into Partnership on Credit Guarantee

Chief Executive Officer of CGCC, Mr. Wong Keet Loong mentioned that “CGCC is pleased to partner with Campu Bank which has a wide network of branches that can reach out to more customers to grow the development of SMEs.”

Mr. Wong added that “We are very encouraged to see the growth of the guaranteed loans in the first 2 months of the year which makes up about 45% of guarantees issued in 2021.  With more economic activities, we are confident that the demand for credit guarantees will increase loans to business owners in Cambodia.  We hope the participating FIs will reach out to more SMEs including the micro-segment to give them an opportunity to grow their business”

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 21 February 2022, CGCC has supported 258 businesses by providing credit guarantees for their loan applications, amounting to USD 26.62 million. CGCC has provided the most guarantee to SMEs, which is accounted for 96% of the total businesses receiving the credit guarantee from CGCC.

Click here to read about: CGCC and CAB Signed on Credit Guarantee Agreement to Provide Loans to MSMEs and Large Businesses

Unveiling a Unique Credit Guarantee Concept in Kingdom

‘Many business owners of SMEs need financing to help them, and this is where the government is trying to spread the wealth around the country and not just to the people who are doing well. Fundamentally, we want to be able to make changes for the people like those in the provinces to help improve their livelihoods’

Officially given the green light in August 2020 by Prime Minister Hun Sen as part of the government’s recovery plan under the Ministry of Economy and Finance, the establishment of the state-owned company, Credit Guarantee Corporation of Cambodia (CGCC), introduced a new concept in Cambodia business finance which has been tried and tested elsewhere.

Credit Guarantee, which the CGCC offers is designed to help businesses that have good potential to receive a bank loan even if they don’t have the collateral usually required to back it up. It provides them with a merit-based opportunity that is often lacking in Cambodia for SMEs and Micro Small Medium Enterprises (MSMEs).

“Credit guarantee is new in Cambodia but not in the region, as any country that wants to develop SMEs needs to have a credit guarantee organisation to help them continue to borrow,” Wong Keet Loong, CEO, CGCC, told Khmer Times in an exclusive interview.

Originally from Malaysia, Wong arrived in Phnom Penh during the Covid months of 2020 to run the company and help the ministry stimulate the growth of SMEs and MSMEs which account for 70 percent of the workforce in Cambodia and 58 percent of the country’s GDP, as well as offering loan guarantees for larger-firms.

He’s satisfied with the progress the CGCC has made under his guard.

“We launched our first scheme, Business Recovery Guarantee Scheme (BRGS), on 29 March last year. It was part of the government’s Covid assistance, and to date, we’ve done about 275 guarantees, totalling around $28 million. I can say around 275 businesses have benefitted from the guarantees, so I would say it’s moving along nicely,” he said.

He explained how people who wanted to avail themselves of a CGCC loan guarantee for their business could request it from a partnered bank that would assess their application before sharing it with the CGCC, who would then decide whether to issue the guarantee.

On the CGCC’s website, there is an impressive amount of statistics and information available, showing the company’s activities and performance, with informative monthly factsheets, the latest newsletter, and explaining to visitors how to apply for a credit guarantee for their business. SMEs have been by far the largest recipient of guarantees, making up 90 percent of them in terms of numbers, with the smaller amounts of below $50,000 and as small as $1,000, comprising the majority of loans granted guarantees by the CGCC.

“Many business owners of SMEs need financing to help them, and this is where the government is trying to spread the wealth around the country and not just to the people who are doing well. Fundamentally, we want to be able to make changes for the people like those in the provinces to help improve their livelihoods,” Wong said, who has been able to examine data of businesses who applied for loan guarantees, collected by its Participating Financial Institutions (PFIs), the banks and micro-financing institutions, who the CGCC partners with to grant the loans. He noted, however, that the work doesn’t come without challenges.

“Since credit guarantee is new in Cambodia some bank staff and business owners don’t understand yet how it can be beneficial to them, because traditionally when banks want to lend money here the first thing that they ask is what collateral they have. You have to educate both bank staff and customers,” he said. While explaining the process, he said, “When we talk to the CEOs and top managers of the banks, they understand, but I find the dissemination of information to the ground, to the branch managers and salespeople, the ones that face the customers, is still lacking.”

Another issue that Wong encounters is the age-old fear permeating the banking community here, of people milking the system.

“Bankers are also concerned that if the customers know that the CGCC is government-owned, then they might be less committed to repaying their loans. I can understand this fear based on reported abuses of the system in the past,” he said.

The work includes giving non-secured loans, which make up almost 80 percent of the loans guaranteed by the CGCC.

“Banks are not doing unsecured lending in a big way because they are concerned about people not being responsible or honest. But as the country matures, and as the borrowers mature, unsecured lending will arrive, even if it takes a bit of time,” he said.

As for the SME owners applying for loans, Wong notices that the level of financial literacy among them generally needs to improve too: “I look at some of the loan applications and the way they manage their finances, as in what are their expenses versus their costs. Your business expenses and your personal expenses are two different things, but most of the time, you hear the business and the individual being the same. When you run your business, you’ve got to make sure they are separate.”

While he acknowledged the NBC for its educational “Let’s talk money” campaign to increase financial inclusion through education, Wong had a novel suggestion for how the Banks could play a critical role through the increased digitalisation of their services.

“Hopefully, instead of just using the apps to make transactions, the FI’s can put education in their apps. I’m sure the digital experts they have are creative, so they could make it into something also engaging that will help people use their app more by providing this value-added material,” said Wong.

In addition to the expected growth for SMEs in the digital sector in the coming years, Wong sees the potential in processing the vast agricultural production in Cambodia, something neighbouring Vietnam has profited well from already.

“There are not enough downstream industries in Cambodia. For example, a lot of cassava and rice is grown here, where they are planted, grown and then just exported. Whereas in Vietnam or China, they process these products, creating other industries as well. There’s a chain,” Wong said, but added that he was “optimistic because now that the economy has opened up, it gives the opportunity for businesses to strive and grow.”

Credit to: Khmer Times, March 10, 2022

Click here to read about: CGCC Introduces Credit Guarantee Mechanisms and Benefits for Banks, MFIs and Businesses

CGCC Introduces Credit Guarantee Mechanisms and Benefits for Banks, MFIs and Businesses

Lack of collateral is the main challenge for businesses in Cambodia to get loans. The Royal Government of Cambodia established the Credit Guarantee Corporation of Cambodia (CGCC) to address this challenge. With credit guarantees, borrowing without collateral is no longer impossible. For CGCC to yield the benefits requires a good understanding from relevant stakeholders about how it works.

Simply put, CGCC provides credit guarantees to share the credit risk with the banks on loans made to businesses. In other words, the banks can claim from CGCC if the guaranteed loan defaults. There are two main types of credit guarantee – individual guarantee whereby the guarantee covers individual loans and portfolio guarantee whereby the guarantee covers a portfolio consisting of multiple loans. Since CGCC itself is not a lending institution, it currently collaborates with banks and micro-finance institutions (MFIs) that are the participating financial institutions (PFIs) to provide guaranteed loans to businesses. As a government-backed institution with adequate capital in its account, CGCC is set to provide a wide range of guarantees on loans disbursed to Cambodian-owned businesses across the country.

 

Why should the lender need the credit guarantee?

CGCC Introduces Credit Guarantee Mechanisms and Benefits for Banks, MFIs and Businesses
រូបភាព៖ ពិធីចុះហត្ថលេខាលើកិច្ចព្រមព្រៀងធានាឥណទានរវាង សាជីវកម្មធានាឥណទានកម្ពុជា និងស្ថាប័នហិរញ្ញវត្ថុចូលរួមជុំទី២ កាលពីថ្ងៃទី២៩ ខែមិថុនា ឆ្នាំ២០២១

When lending, banks normally protect themselves by requiring collateral from the borrowers. When the borrower cannot repay the loan, the banks liquidate the collaterals to cover the loss. If the required collateral is not sufficient, the bank is unlikely to lend. The collateral requirement becomes more stringent, especially during times of uncertainty such as the COVID-19 Pandemic, because businesses are perceived to be riskier, and banks become more risk-averse. Now with CGCC, the banks can protect themselves with the credit guarantee instead of the collaterals. Currently, CGCC provides credit guarantees up to 80% of the outstanding loan principal which means that the bank bears the remaining 20% of the loss if the loan defaults. The credit guarantee empowers banks to remain competitive in the market and to lend out more to underserved borrowers who lack collaterals, what is referred to as “credit additionality.”

 

Why should the borrower need the credit guarantee?

CGCC Introduces Credit Guarantee Mechanisms and Benefits for Banks, MFIs and Businesses
រូបភាពទីក្រុងភ្នំពេញ

Credit guarantees increase the borrowing capacity. CGCC provides guarantees that act as collateral on the borrower’s behalf. Needless to say, CGCC cannot be beneficial for every business. By all means, if the business has sufficient collateral and the ability to repay the loan, the chance is that such a business does not need a credit guarantee, and the bank would also be happy to lend even without CGCC’s guarantee. However, it is common that a potential business with the ability to repay the loan is unable to borrow because of insufficient collateral. Businesses simply cannot pledge the collateral on every loan they wish to borrow. The collateral is limited. This is a huge loss to the business and the economy as a whole. With the required loan, the business could have generated more income, employed more workers, and produced goods or services that contribute to the economic growth of the country. When CGCC provides guarantees to the banks, the borrowers now have easier access to loans from the banks because the banks are willing to lend more with less collateral requirement.

Credit guarantees are used by many countries as a policy tool to improve access to finance and financial inclusion. However, never before has a credit guarantee corporation been incorporated in Cambodia. According to the World Bank, “Public credit guarantee schemes (CGSs) are a common form of government intervention to unlock finance for small and medium enterprises (SMEs). More than half of all countries in the world have a CGS for SMEs and the number is growing.” While many credit guarantee schemes have proved successful in supporting the SMEs, many have also failed.

It is still early to assess how far and how fast CGCC can support the businesses. CGCC must continue to strengthen credibility, efficiency, and transparency and adhere to the best practices including the World Bank’s principles for public credit guarantee schemes for SMEs to gain trust and support from all relevant stakeholders. What is also important at this stage is that all the players understand and start to utilize the credit guarantees for the right purposes.

Article in Khmer Language from Fresh News: 23 February 2022

From the original article of CGCC Newsletter Issue 01៖ https://cgcc.com.kh/en/publication/newsletter-issue-01_october-to-december-2021/

Business Installment Loan Program of Sathapana Bank with CGCC scheme

Are you looking for a loan without collateral to expand or support your business?

To fully support Cambodian SMEs during this Covid-19 pandemic, Sathapana Bank has signed a partnership with the Credit Guarantee Corporation of Cambodia (CGCC) to provide unsecured loans to borrowers with the capabilities to repay but lack collateral.
Businesses can use the loan for the purpose of investment capital, working capital, or business expansion.

Product Features:

  • Loan Tenor 6 months up to 7 years​
  • Loan size USD 30,000 up to 300,000
  • Loan in USD or Khmer Riel
  • Flexible repayment mode

For More Information:

Visit Sathapana’s website for more information: Sathapana and CGCC’s Guarantee Product

*** Note: The original content on this page is produced and owned by Sathapana Bank. 

Click here to read about: Business Loan Guarantee scheme of Maybank with CGCC

Business Loan Guarantee scheme of Maybank with CGCC

Take your business to greater heights

Apply Business Loan with NO COLLATERAL* with Maybank now and enjoy special offer.*The financing is guaranteed by Credit Guarantee Corporation of Cambodia(CGCC).

Eligibility

For loans to be qualified for the CGCC’s guarantee scheme, the borrowers must fall into the following criteria:

  • The Borrower must be a majority Cambodian-owned business (>50% ownership).
  • The Borrower must produce a business registration issued by appropriate government authorities.
  • The Borrower who is a non-registered business must proceed with the registration after the guarantee is approved. If the borrower remains a non-registered business, an additional guarantee fee of 0.5% per annum of the guaranteed amount will be imposed on every anniversary of the guarantee.
  • All Borrowers should be financially viable

 

Offers

  • Fast & efficient approval on simplified and standardized document
  • Loan amount up to USD400,000
  • Competitive interest rate

 

Terms & Conditions

Other Terms & Conditions Apply.

Visit Maybank (Cambodia) website for more information: Maybank (Cambodia) and CGCC’s Guarantee Product

 

*** Note: The original content on this page is produced and owned by Maybank (Cambodia)

Click here to read about: Guaranteed Business Loan Product of FTB with CGCC

Guaranteed Business Loan Product of FTB with CGCC

Not having sufficient collateral to request additional loans for your business? No worries, FTB can support you!

Special Features
Loan Size        :    Up to USD 1,000,000
Loan Tenor    :    Up to 7 years
Interest rate  :     Very competitive
Currency        :     KHR or USD

How to Apply

Please contact FTB’s Customer Care Center via:

 Hotline 24/7: +855 23 862 111
 Email: [email protected]

 

Visit FTB’s website for more information: FTB and CGCC’s Guarantee Product

 

*** Note: The original content on this page is produced and owned by FTB. 

Two Financial Institutions jointly Support SMEs to Boost Economic Growth

News from BTV on “Signing Ceremony on Credit Guarantee Agreement between CGCC & Cambodia Asia Bank”

Click here to read about: CGCC recommends ways to Access to Guaranteed Loans

CGCC and CAB Signed on Credit Guarantee Agreement to Provide Loans to MSMEs and Large Businesses Which Lack Collaterals

On February 9th, 2022,  Credit Guarantee Corporation of Cambodia (CGCC) and Cambodia Asia Bank (CAB) hosted a signing ceremony on Credit Guarantee Agreement at Sofitel Phokeethra Phnom Penh Hotel. The event was attended by Mr. Mitra Dwaipayan, Chief Operations Officer of CAB, Mr. Wong Keet Long, Chief Executive Officer of CGCC, and senior management from CAB and CGCC.

CGCC and CAB Signed on Credit Guarantee Agreement to Provide Loans to MSMEs and Large Businesses Which Lack Collaterals

Mr. Mitra Dwaipayan mentioned in the ceremony that “CAB welcomes all the cooperation which is beneficial to all the stakeholders. From this partnership, MSMEs could request a loan from the bank to expand and operate their businesses even if they lack collateral, and the bank is more confident to give loans to the customers under this scheme. I think this scenario could not have happened without the great initiation from CGCC.”

Mr. Mitra has added that “About 30 years of CAB operation, we have contributed a lot to the banking and finance industry in Cambodia through our various products and services that benefit and serve our customers’ needs on time. We have also supported the prioritized sectors that have boosted economic growth. I believe that the cooperation between CAB and CGCC will help MSMEs as well as the banking and finance industry to be more developed.”

CGCC and CAB Signed on Credit Guarantee Agreement to Provide Loans to MSMEs and Large Businesses Which Lack Collaterals

Mr. Wong Keet Loong, CEO of CGCC mentioned that “This partnership with CAB will be our 22nd participating financial institution (FI) in providing guaranteed loans to businesses.  FIs are beginning to understand how the credit guarantee can benefit the FI in providing higher loan amounts to their borrowers despite being limited by collaterals.”

Mr. Wong added that “With more FIs participating in the credit guarantee scheme, CGCC hopes that more business owners all over the country will be able to access formal financing. This will enable higher economic activities that will drive the national economic growth.”

Please be noted that this agreement has been made especially for MSME owners which are in need of financial support to operate and expand their businesses, yet they lack collateral when requesting loans, so they still could request loans to CAB under this scheme.

CGCC and CAB Signed on Credit Guarantee Agreement to Provide Loans to MSMEs and Large Businesses Which Lack Collaterals

About CAB

Cambodia Asia Bank (CAB) is the most trusted commercial bank that has been operating in Cambodia since 1993. CAB provided customers and business partners with various products and services such as loans, deposits, trade finances, international remittances, and global card payments such as Visa, Master Card, and UnionPay.

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 02 February 2022, CGCC has supported 237 businesses by providing credit guarantees for their loan applications, amounting to more than USD 25 million. CGCC has provided the most guarantee to SMEs, which is accounted for 96% of the total businesses receiving the credit guarantee from CGCC.

Click here to read about: CGCC shares tips to access to guaranteed loans for Women Entrepreneurs

CGCC invests in CAIC’s guaranteed bond to support Techo Int’l Airport

The Credit Guarantee Corporation of Cambodia Plc., a state-owned enterprise, has invested $2 million in guaranteed bonds to support Techo International Airport development in Kandal province.

The investment agreement was signed yesterday by Charles Vann, Director of Cambodia Airport Investment Co., Ltd (CAIC) and Wong Keet Loong, CEO of Credit Guarantee Corporation of Cambodia Plc in the presence of Pung Kheav Se, Chairman of Overseas Cambodian Investment Corporation Ltd. (OCIC) and Mey Vann, Secretary of State of the Ministry of Economy and Finance and members of CGCC’s Board of Directors.

The coupon rate of CAIC bonds is 5.5 per cent per annum with a three-year tenor and guaranteed by OCIC. The funds raised from the Techo International Airport Guaranteed Bond will be used for the construction and development of the Techo International Airport in Kandal province, the CAIC said.

Techo International Airport project is currently 30 percent completed with a total amount of $390 million, excluding airport land already invested by CAIC.

Wong  said the CGCC’s investment is to contribute to the development of infrastructure in Cambodia.

“This bond investment is part of CGCC’s diversification in investing our funds in bonds other than fixed deposits. We are pleased to invest and support the development of the Techo International Airport in contributing to building Cambodia’s national pride,” he said.

The CGCC’s investment in CAIC’s guaranteed bond came after local financial sectors – Wing Bank Plc, Alpha Commercial Bank, Prince Bank, FTB bank, ABA Bank, CPBank, and ACLEDA Bank.

CAIC is a joint venture between the Royal Government of Cambodia, represented by the State Secretariat of Civil Aviation, and OCIC, the largest investment group and local conglomerate in Cambodia.

The RGC has granted CAIC the rights to own, design, construct, finance, operate, maintain and manage Techo International Airport Project.

CGCC is operated under the technical and financial guidance of the Ministry of Economy and Finance. It was incorporated on November 3, 2020, and has been receiving technical support from the Asian Development Bank, World Bank and UNCDF.

Credit to: Khmer Times, 28 January 2022

Credit Guarantee Corporation of Cambodia Plc. Invested 8,000 Million Riels (Approximately $2 Million) in the CAIC’s Bond to Support the Development of Techo International Airport

On 27 January 2022, a signing ceremony for “Techo International Airport Guaranteed Bond” is held between Cambodia Airport Investment Co., Ltd. (CAIC) represented by Mr. Charles Vann, Director, and Credit Guarantee Corporation of Cambodia Plc. (CGCC) represented by Mr. Wong Keet Loong, CEO, presided over by Neak Oknha Dr. Pung Kheav Se, Chairman of Overseas Cambodian Investment Corporation Ltd. (OCIC), and H.E. Mey Vann, Secretary of State of Ministry of Economy and Finance & member of CGCC’s Board of Directors for the investment of 8,000 Million Riels in Techo International Airport Guaranteed Bond through private placement.

Credit Guarantee Corporation of Cambodia Plc. Invested 8,000 Million Riels (Approximately $2 Million) in the CAIC’s Bond to Support the Development of Techo International Airport

Mr. Wong Keet Loong, CGCC’s CEO, said “This bond investment is part of CGCC’s diversification in investing our funds in bonds other than fixed deposits.  We are pleased to invest and support the development of the TIA in contributing to building Cambodia’s national pride”.

The funds raised from Techo International Airport Guaranteed Bond will be used for the construction and development of Techo International Airport in Kandal province. Techo International Airport project is currently 30% completed with a total amount of USD390 Million (excluding airport land) already invested by CAIC.

The coupon rate of CAIC bond is 5.5% per annum with 3-year tenor and guaranteed by OCIC.

Credit Guarantee Corporation of Cambodia Plc. Invested 8,000 Million Riels (Approximately $2 Million) in the CAIC’s Bond to Support the Development of Techo International Airport

OCIC is the largest investment group and local conglomerate in Cambodia. The company’s core expertise is in infrastructure development, real estate, construction, property management, education, medical, shopping mall, hotel, rice mill, manufacturing etc with notable projects such as Techo International Airport, Diamond Island City, Norea Island, Chroy Changvar Satellite City and Olympia City Complex.

CAIC is a joint venture between the Royal Government of Cambodia (RGC), represented by the State Secretariat of Civil Aviation, and OCIC. The RGC has granted CAIC the rights to own, design, construct, finance, operate, maintain and manage Techo International Airport Project.

Credit Guarantee Corporation of Cambodia Plc. (CGCC) is a state-owned enterprise established by a Sub-Decree No. 140 ANKR.BK dated 1st September 2020. CGCC is operated under the technical and financial guidance of the Ministry of Economy and Finance. CGCC was incorporated on 3rd November 2020 and has been receiving technical support from ADB, World Bank and UNCDF. CGCC launched the first guarantee scheme on 29th March 2021​.

CGCC’s vision is to be the preferred credit guarantee institution in Cambodia to improve financial inclusion and develop the growth of SMEs.

Credit Guarantee Corporation of Cambodia Plc. Invested 8,000 Million Riels (Approximately $2 Million) in the CAIC’s Bond to Support the Development of Techo International Airport

Credit Guarantee Corporation of Cambodia Plc. Invested 8,000 Million Riels (Approximately $2 Million) in the CAIC’s Bond to Support the Development of Techo International Airport

Click here to read about: Dissemination Workshop on Access to Credit Guarantee for Businesses in Tourism Sector