On 7 March 2023 afternoon, Mr. Wong Keet Loong, CEO of CGCC, and all CGCC’s management and staff celebrated International Women’s Day by appreciating all CGCC’s female staff who have contributed significantly to CGCC’s smooth and successful operations. We are living in an era where there is active women’s participation with bravery and sacrifice in development. To show appreciation gesture, CGCC also handed gifts to all female staff.
CGCC Celebrated International Women’s DayCGCC Celebrated International Women’s Day
In addition, on 8 March 2023 morning, CGCC staff joined the celebration of International Women’s Day with the Association Banks of Cambodia (ABC), by donating blood to give hope to those in urgent need of blood.
CGCC Celebrated International Women’s DayCGCC Celebrated International Women’s Day
The 11th Give a Day has featured the Credit Guarantee Corporation of Cambodia as its keynote as well as enabled Cambodia’s entrepreneurial ecosystem to connect at the new Khmer Enterprise Headquarters for the first time in 2023.
Khmer Enterprise CEO Dr. Chhieng Vanmunin delivered the welcoming remarks highlighting the ongoing progression of the initiative which was first piloted in 2021 before receiving its full funding for monthly and quarterly meetings in 2022 and has now been renewed for 2023.
“The Give a Day monthly meetings and quarterly ecosystem builder events have been greatly welcomed by Cambodia’s entrepreneurial community – and have provided both learnings and networking opportunities between various sectors,” he told over 50 attendees from the ecosystem at KE headquarters.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentSabine Joukes Pact Cambodia Country Director and WE Act Chief of Party, Khmer Enterprise CEO Dr. Chhieng Vanmunin, Rajiv Pradhan Country Director at Swisscontact in Cambodia.
“We also wanted to welcome everyone to our new headquarters at the Business Development Center in Chroy Changvar, Phnom Penh, and advise that our open working space is available to everyone in the ecosystem as well as both our meetings’ rooms and event space,” he added.
Rajiv Pradhan Country Director at Swisscontact in Cambodia and Sabine Joukes Pact Cambodia Country Director and WE Act Chief of Party echoed this statement adding it was fantastic to reconnect the ecosystem for the first time in 2023.
Increase credit guarantee issuance by 50% in 2023
Delivering the keynote CGCC CEO, Wong Keet Loong commented the scheme was looking to increase the number of transactions it underwrites by 50% in 2023 as the organization looks to increase its outreach to the country’s micro and small and medium businesses, (MSMEs).
CGCC received its sub-decree on September 2020 and was fully incorporated in November 2020 its guarantees are intended to expand the availability of credit to smaller enterprises that may not have the collateral which banks typically require to advance working capital loans.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentConversations after the keynote presentation.
Initially launched as a tool to close the credit gap that emerged between small businesses during the pandemic, the CGCC issued its first guarantee in April 2021 and has since given a total of 985 Letters of Guarantee (LG) for loans worth $92.7. Mr Loong said that the CGCC had even more ambitious targets for 2023.
“My biggest goal for this year is to increase the outreach of our guarantees. The CGCC wants to provide guarantees to 1500 SMEs this year. We want to guarantee $100 million of loans in 2023. I know that is optimistic but I believe it can be done,” he said in response to a question from Cambodia Investment Review.
Rising interest rates may impact growth
Mr Loong said that the main barrier to reaching this target was the global macro picture, particularly the impact of rising US interest rates.
“The main issue right now is that external factors are affecting the cost of funding, which is going up as US interest rates rise and this is affecting a number of financial institutions (FIs). They see that fixed deposit rates are going crazy which is good for depositors, but not FIs and this impacts their lending,” he added.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentAttendees at the 11th Give a Day.
Global factors may act as a drag on the CGCC’s work in the near term, but fellow speaker H.E. Dr. Chhieng Vanmunin, CEO of Khmer Enterprise, said that if credit guarantees become more widely used in Cambodia it would make it much easier for firms to do business internationally.
“In their current state, a lot of Cambodian companies are unable to demonstrate a track record of success, however, if they run through the credit guarantee program with CGCC it provides a history of how well they managed issues such as shipping and cash flow.
So this is one of the things that we support them to expand their market internationally,” he said.
40% of its guarantees go to female-owned businesses
The CGCC currently offers four different guarantee products and in April last year, it launched it’s third the Women Entrepreneurs Guarantee Scheme (WEGS), a $50m capped fund that is aimed at supporting women and female-owned businesses.
According to the CGCC’s data up to 40% of its guarantees go to female-owned businesses, whereas Mr Loong said that up to 65% of Cambodian MSMEs were run by women. An audience member, who didn’t identify herself, suggested that this gap was partly due to issues over lack of financial knowledge.
“One reason is that we know most women entrepreneur’s businesses are not registered and one way to improve that is via financial literacy, and this will have many benefits. If financial literacy is growing then entrepreneurs are more confident, more informed, and able to negotiate good loans,” she said.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentQuestions and answer session.
Mr Loong responded that the CGCC did support unregistered businesses, for the first year at least and that expanding awareness of credit guarantees should in turn increase the number of registrations by female business owners.
“However, we tell customers that you need to be registered after a year, because when the anniversary comes, if you’re not registered, then we charge you an additional 0.5%. So, in a way, it incentivizes businesses to be registered. But when they come on board, they can be unregistered,” he said.
The Give a Day program returns in 2023
Give a Day is an initiative within the Entrepreneurship Ecosystem Building Project (EEB) which is jointly funded by Khmer Enterprise, USAID’s WE Act Project through Pact Cambodia and Swisscontact.
In addition, to monthly meetings, the initiative also included a quarterly Ecosystem Builders Network (EBN) event that focused on mapping the six pillars of Isenberg’s Model of the Entrepreneurial Ecosystem.
Give a Day: Credit Guarantee Schemes & Its role in Enterprise DevelopmentThe 11th Give a Day program at Khmer Enterprise Head Office on February 10, 2023.
The quarterly meetings created a space through which ecosystem builders and government agencies can share information, foster best practices, identify market gaps and opportunities, and explore collaboration or complementarity to strengthen the ecosystem.
Cambodia’s ESO ecosystem, broadly defined as groups that support, train, and fund entrepreneurs is still in the nascent stage with many new organizations launched to help nature and develop the sector.
“I’m Financially Literate Program” was successfully launched by Sathapana Bank, Co-sponsored by Khmer Enterprise, Manulife Cambodia, and Credit Guarantee Corporation of Cambodia (CGCC). The first cohort of this program was organized on 03 & 04 and 10 & 11 September 2022 to provide non-financial services to SMEs and MSMEs and especially women in business.
More than 30 Entrepreneurs and business owners attended the first cohort, and shared their experiences as well as related financial issues, and they also had the opportunity to learn more about entrepreneurship, prepare financial statements for Business, understand loans with banks and choose the right loan for their businesses.
This training program is specifically designed to provide practical skills and experience related to financial literacy and business management skills, as well as access to business networks that can drive business growth for entrepreneurs, especially women entrepreneurs.
CGCC supports the accelerating SMEs’ Financial Literacy through the “I’m Financially Literate Program” first cohortCGCC supports the accelerating SMEs’ Financial Literacy through the “I’m Financially Literate Program” first cohort
On 01 September 2022, Ministry of Economy and Finance and CGCC organized a Dissemination Seminar on “Guaranteed Loans to support SMEs Development in Tourism Sector” in Kampot Province, in collaboration with the Ministry of Tourism, through the provincial department of tourism, and SME bank, which was participated by more than 50 business owners in the tourism sector.
This seminar was presided by Mrs. Chin Sopheakla, Deputy Director of Kampot Provincial Department of Tourism, Mr. No Lida, Deputy CEO of CGCC, and Mr. Neav Sokun, Chief Operation Officer of SME Bank.
Dissemination Seminar on “Guaranteed Loans to support SMEs Development in Tourism Sector”
Through this workshop, SMEs in the tourism sector, including resorts, hotels, guesthouses, restaurants, etc., were informed about the benefits of getting guaranteed loans, in response to the lack of collateral when applying for loans for the purpose of improving and recovering their business that are impacted by COVID-19 pandemic.
SMEs also learned about government’s financial supporting mechanisms on favorable loans conditions such as low-interest rate through SME Bank and guaranteed without collateral by CGCC.SMEs can request for guaranteed loans for their tourism related businesses through CGCC’s “Co-Financing Guarantee Scheme for Tourism Sector” that act as collaterals for business loans in the tourism sector through “Tourism Recovery Co-financing Scheme” of SME Bank.
Dissemination Seminar on “Guaranteed Loans to support SMEs Development in Tourism Sector”Dissemination Seminar on “Guaranteed Loans to support SMEs Development in Tourism Sector”
(Phnom Penh, 01 April 2022): Credit Guarantee Corporation of Cambodia (CGCC) is pleased to announce the official launch of the USD 30 million “Women Entrepreneurs Guarantee Scheme (WEGS)”, effective from 01 April 2022, to support women-owned businesses who lack collateral when applying for loans to enhance their access to formal loans for both working capital and business expansion.
WEGS is in line with the “Strategic Framework and Programs for Economic Recovery in the Context of Living with the COVID-19 in a New Normal 2021 – 2023” of the Royal Government of Cambodia to encourage commercial banks and microfinance institutions to increase additional lending by relaxing the credit guarantee requirements and expanding the scope of guarantees with favorable terms.
WEGS is specifically designed for women and women-owned businesses, aiming to narrow the gap between the supply and demand for financing by providing a higher guaranteed coverage of 80% and a lower guarantee fee for all sectors with favorable credit guarantee features. This scheme is eligible for all types of loan facilities including term loans, overdrafts, trade facilities, etc. WEGS is the third credit guarantee scheme offered by CGCC. As of the end of March 2022, CGCC has supported more than 300 businesses, of which 30% are women-owned businesses. WEGS is available for download from https://bit.ly/3LqV5TV.
CGCC is the first credit guarantee corporation in Cambodia, established by a sub-degree of the Royal Government of Cambodia in September 2020, as a state-owned enterprise under the technical and financial guidance of the Ministry of Economy and Finance. CGCC’s main mission is to provide credit guarantees to improve financial inclusion and support the development of small and medium enterprises.
For more information, please contact CGCC via 023 722 123, or visit CGCC’s official website www.cgcc.com.kh.
Cambodia aims to boost financial inclusion for women entrepreneurs through Credit Guarantee Corporation of Cambodia Plc (CGCC) and support for women-led micro, small- and medium-sized enterprises (MSME) as part of broader efforts to bridge financing gaps for businesswomen and underpin Covid-19 economic recovery plans.
“A conference on financial inclusion of women entrepreneurs in Cambodia, co-hosted by the UN Development Programme [UNDP] and the [CGCC], was held in Phnom Penh [on March 25] to discuss existing challenges in financial inclusion and harness collective intelligence and knowledge on enhancing access to finance for women-led [MSMEs],” the UNDP said in a statement.
The main findings of the UNDP’s upcoming report on the “Cambodia Public Credit Guarantee Scheme for Small and Medium-Sized Enterprises and Women-Owned Small and Medium Enterprises” were presented at the event, the March 25 statement said.
The report “found that the main challenges for MSMEs to access finance are, in order of severity, the problematic requirement for collaterals as loan securities, stringent lending requirements which do not consider MSMEs business operation, high-interest rates, short loan repayment periods, and weak MSMEs overall management capacity and keeping of quality financial and other supporting documentation”, it added.
UNDP Cambodia resident representative Alissar Chaker said in the statement that “women entrepreneurs are underserved by the financial system”.
“Although they own 61 percent of businesses in the country, only 3 percent of the nation’s women entrepreneurs have access to formal credit,” she said, citing a 2019 World Bank report.
“Women-owned MSMEs are a great asset for post-pandemic recovery and future prosperity. A relevant public credit guarantee scheme would adjust credit market failures and access challenges by providing third-party credit risk mitigation to women lenders in case of loan default.
“It will also promote a more inclusive financial system and wider access which is not necessarily preconditioned by collaterals, often lacking or insufficient for women.
“UNDP and other development partners are supporting national efforts for accelerating socio-economic empowerment of women. Women entrepreneurs are encouraged to stay abreast of financial and non-financial services available in the market, including public guarantees, to make informed decisions and widen their options for financial accessibility,” she added.
CGCC CEO Wong Keet Loong said: “Launched in early 2021, CGCC is tasked with the mission to provide a credit guarantee, and thus, to promote inclusive access to finance. From our portfolio, small and medium enterprises cover most of our guaranteed loans [96 percent].
“However, only 25 percent of all businesses that received loan guarantees are owned by women.
“CGCC’s new scheme, launched during the conference today, which is specifically designed for women-led MSMEs owners aims to close the financing gap among women entrepreneurs and formal financial institutions,” he said.
The statement added that the “report estimates that a public credit guarantee scheme would have a significant positive impact on the country’s GDP [gross domestic product] and on job creation. Two main sectors were highlighted: agriculture and hospitality – that is hotels and restaurants”.
“The report estimates that for every $100 million invested in agriculture, an approximate $221 million would be generated as value added to the national inflation-adjusted or real GDP, and 48,737 jobs would be created – 17,348 for women.
“The turnover on investment from the hospitality sector was estimated at $201 million, with 16,226 potential jobs created – 1,130 positions for women,” the UNDP added.
