CGCC

Gov’t credit guarantee unit set for 2021

Phnom Penh Post: 26 November 2020

The Credit Guarantee Corporation of Cambodia (CGCC) is on track to be launched in the first half of next year, Banking Association of Cambodia (ABC) president In Channy told The Post on November 26.

The CGCC was established by Sub-Decree No 140 ANKr BK on September 1, coming under the Ministry of Economy and Finance and with $200 million in registered capital from the government.

The sub-decree said the corporation will provide loans “in a professional manner” to tackle challenges in the lending market and promote financial inclusion.

It read: “The CGCC will be tasked with providing credit services, evaluating and managing risks, cooperating with banks and financial institutions and development partners that also provide credit services, et cetera.”

The corporation sets out to increase access to financing for Covid-19-strained businesses in priority sectors and adapt to the Kingdom’s post-Covid-19 start-up landscape.

It officially registered with the Ministry of Commerce on November 13.

Channy said the CGCC will guarantee a source of capital for small- and medium-sized enterprises (SMEs) with limited collateral and provide them with collateral protection insurance.

He said the corporation would serve as a much-needed crutch for the private sector, and would particularly be able to respond to struggling SMEs’ credit needs.

“We have seen in the past that most of the SMEs that applied for loans at their banks and microfinance institutions [MFIs] did not have sufficient collateral, which made it impossible for them to fully obtain the loans that they need,” Channy said.

During a promotional programme for CGCC held at the finance ministry on November 23, senior government officials called on SMEs that have been unable to access loans during Covid-19 to apply at the corporation.

Speaking during the programme, ministry undersecretary of state Ros Seilava said the CGCC will help SMEs rehabilitate their businesses during Covid-19, and would focus chiefly on the agricultural, industrial and service sectors.

“I would like to appeal to all SMEs that have been facing difficulties in obtaining financing from commercial banks to re-apply for loans there,” he said.

He claimed that in 2021-2023, the amount that SMEs can borrow will be capped at $500,000. “Our gameplan is to help SMEs run their businesses smoothly during this health crisis,” Seilava said.

In a press release, the ministry said the CGCC will break through barriers to effective financing processes and provide new opportunities for banks and MFIs to expand their customer base.

“The CGCC will provide a substantial boon for the Cambodian economy – it will promote financial inclusion, support new growth sources and diversify the economy in line with industrial development policies, as well as offer an environment conducive to the creation of new loan products,” it said.

Through the corporation, the government will share risk with banking institutions, MFIs, as well as business owners in credit operations in order to breed credit and economic activity that would not manifest otherwise, the ministry said.

The CGCC will shield businesses from Covid-19 fallout and promote the long-term development of SMEs, it said.

According to Seilava, to rehabilitate the economy after the Covid-19 crisis, the government is seeking more funding from international financial partners, claiming that the World Bank plans to provide about $100 million in loan to government for additional capital.

អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)

សាជីវកម្ម​ធានា​ឥណទាន​កម្ពុជា​ (​ស​.​ធ​.​ក​.) ​គឺជា​សហគ្រាស​សាធារណៈ​ ​ដែល​ត្រូវ​បាន​បង្កើត​ឡើង​ដោយ​អនុក្រឹត្យ​លេខ​ ​១​៤​០​ ​អន​ក្រ​.​បក​ ​ចុះ​ថ្ងៃ​ទី​១​ ​ខែកញ្ញា​ ​ឆ្នាំ​២​០​២​០​។​ ​ស​.​ធ​.​ក​. ​ស្ថិតនៅ​ក្រោម​អាណាព្យាបាល​បច្ចេកទេស​ ​និង​ហិរញ្ញវត្ថុ​ ​របស់​​​ក្រសួងសេដ្ឋកិច្ច​ ​និង​ហិរញ្ញវត្ថុ។

ចុចទីនេះដើម្បីអាន និងទាញយកអនុក្រឹត្យ: CGCC Sub-Degree

អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)
អនុក្រឹត្យស្តីពីការបង្កើតសាជីវកម្មធានាឥណទានកម្ពុជា (ស.ធ.ក)

Credit guarantee system approved in principle

Khmer Times: July 24, 2020

MINISTER of Economy and Finance Aun Pornmoniroth approved in principle the concept of strategic framework for establishing the Credit Guarantee Corp Cambodia, according to a statement from the Ministry of Economy and Finance (MEF).

MEF’s statement read that the initiative of the establishing corporation is to align with the government’s response mechanism for the fourth-round measures to mitigate the impact of COVID-19 on businesses and workers in Cambodia during the health crisis and to promote economic growth and help businesses rebound.

It said that the Credit Guarantee Corp Cambodia will play a role in providing a credit guarantee scheme (CGS) to companies and businesses in prioritised sectors that are severely affected by COVID-19 in order to enable them to increase the possibility of accessing financing for their working capital, ensuring a sustainable business and aligning with a new context for the business after coronavirus is beaten.

A meeting on the subject discussed the purpose on the establishment of the corporation. It noted challenges are expected to happen during its operation and an action plan to implement the project was prepared.

“The meeting has agreed in principle on the concept of strategic framework for establishing the Credit Guarantee Corporation Cambodia. For the next step, the MEF will proceed with the procedure for the regulation framework, deliver relevant documents, and cooperate with relevant stakeholders in order to make the Credit Guarantee Corporation Cambodia operational soon,” the statement read. “To ensure that the Credit Guarantee Corporation of Cambodia provides credit guarantees for the right targets and efficiency in the urgent stage of COVID-19, the MEF will set up a policy to provide the credit guarantees by determining the sectors, sorts of company, types of businesses that are potential for getting a credit guarantee from the  Credit Guarantee Corporation of Cambodia,” said the MEF.

MEF spokesman Meas Soksensan, told the Khmer Times that the ministry continues working on the criteria and procedures on how to guarantee it gets to the next working phase, but we have reserved the budget to support this scheme.

“We [the government] have an initiative to help the private sector and facilitate the private sector. However, we have to make sure that the money is not lost. It is risk-sharing with the private financial sector,” he added.

“We have to be careful with this because we cannot just give guarantees, but we have to ensure it is not run at a loss because it is a lot of money.”

He said that the credit-guarantee scheme will guarantee loans that are drawn down from the SME Co-Financing Scheme.

On May 26, the government rolled out the fourth-round measures aimed at mitigating the impact of COVID-19 on businesses and workers in Cambodia. These latest measures consist of a combination of new measures and an extension of those measures already in place.

In addition to providing relief to businesses and workers amid the Covid-19 outbreak, this round of measures is also intended to promote economic growth and help businesses rebound after the COVID-19 crisis.

Additionally, the MEF will establish a $200 million credit guarantee fund to provide loan guarantees to ease the cash flow and working capital pressures of businesses in all sectors, which is expected to generate liquidity of at least $2,000 million.

The MEF will also provide additional financing of up to $300 million to promote growth in key sectors during and after the Covid-19 crisis.

On July 14, the MEF approved the following measures aimed at supporting small and medium enterprises (SMEs) for the immediate, short and medium term.

For immediate measures, it will reduce red tape for SMEs, promote financial support to SMEs through the SME Bank and Rural Development Bank.

For the measures in the short and medium term there will be a focus on regulatory framework reforms and implementation, business services, financial support, SME marketing, human resources, research and the development and promotion of an entrepreneurial mindset.