Tag: News

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

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

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

The Credit Guarantee Corporation of Cambodia (CGCC) and Kasikornbank Public Co Ltd’s (KBank) Phnom Penh branch have formalised a credit guarantee agreement. This move aims to enhance confidence and extend guaranteed financing to business proprietors, particularly micro, small and medium-sized enterprises (MSME).

Among those present at the signing ceremony at the CGCC headquarters in Phnom Penh were Ros Seileva, chairman of the CGCC and secretary of state for the Ministry of Economy and Finance, Thai ambassador Cherdkiat Atthakor and KBank Thailand executive vice-president Suwat Techawatanawana.

Wong Keet Loong, the CEO of CGCC, expressed his enthusiasm about the partnership.

“We’re honoured to collaborate with a top-tier bank to provide credit guarantees to bolster MSME financing in Cambodia,” he stated.

He highlighted the extensive experience of the Thai banking sector in guaranteed loans and hoped this would translate to more financing opportunities for Cambodian businesses.

“This partnership paves the way for cross-border guarantees between Thai and Cambodian enterprises. We’re looking to collaborate and learn from the Thai Credit Guarantee Corp, seasoned with over 30 years of expertise, later this year,” Loong added.

Ritthiwut Watthanachai, the general manager of KBank Phnom Penh, emphasised the strategic importance of Cambodia in the growth plan of the Bangkok-headquartered KBank, one of Thailand’s premier financial institutions formerly known as Thai Farmers Bank.

“Our alliance with CGCC significantly broadens our outreach to entrepreneurs, enhancing our service capabilities. Being the first bank to participate in the credit guarantee plan showcases our commitment to fostering MSME growth in alignment with the government’s vision,” Watthanachai said.

CGCC’s core mission is to augment financial inclusivity and foster MSME growth by ensuring loans through Participating Financial Institutions (PFI) for MSMEs. On the other hand, KBank Phnom Penh offers an array of financial services and solutions catering to individuals and enterprises.

Credit to: The Phnom Penh Post, Published on 02 October 2023