CGCC Extends Business Recovery Guarantee Scheme
January 5, 2023Latest News
The Credit Guarantee Corporation of Cambodia (CGCC) on Tuesday announced the extension of the Business Recovery Guarantee Scheme (BRGS) from 1 January 2023 until the scheme is fully utilised.
According to the CGCC press release, the BRGS aims to support businesses, including micro, small and medium enterprises (MSMEs) and large firms, by enhancing their access to formal loans from the Participating Financial Institutions (PFIs) for working capital, investment, and business expansion.
The BRGS, with a scheme size of $200 million, was first launched for the 29 March 2021 to 31 December 2022 period. As of 31 December 2022, approximately $89 million in loans, most without collateral, were sanctioned. Loans under the BRGS are guaranteed by the CGCC.
The CGCC received approval from Deputy Prime Minister, Minister of Economy and Finance Aun Pornmoniroth for the extension of the BRGS after updating some scheme features, including the scheme period, the definition of MSMEs and large firms, and the maximum loan amount for each guarantee.
The CGCC’s credit guarantee under the BRGS will continue to act as collateral for 70-80 percent of the loan amount borrowed from the PFIs, thus, reducing the physical collateral required from borrowers.
Wong Keet Loong, CEO of the CGCC, told Khmer Times, “The maximum guaranteed loan amount has been increased to combine both priority and non-priority sectors, like $300,000 for working capital and $500,000 for investment/business expansion for MSMEs, and $500,000 and $700,000, respectively, for large firms.”
On the benefit of this extension, he said, “an additional $111 million of guaranteed loans is available until the scheme is fully utilised. In addition to the 936 MSMEs who obtained guaranteed loans, this would support more MSMEs in obtaining loans for their businesses during the economic recovery.”
“The Cambodian-owned businesses can approach our 25 PFIs for guaranteed loans. The MSMEs must meet the PFIs loan criteria to be eligible for guaranteed loans,” he remarked.
Various credit guarantee schemes have played a crucial role in strengthening entrepreneurship and enhancing financial inclusion in Cambodia, especially during the Covid-19 pandemic, through the smooth disbursal of loans.
The CGCC has come up with three guarantee schemes so far — the Business Recovery Guarantee Scheme (BRGS) launched in March 2022, the Co-Financing Guarantee Scheme (CFGS) unveiled in September 2021 and the Women Entrepreneurs Guarantee Scheme (WEGS) launched in April 2022, besides the extension of the CFGS to tourism. Each scheme was specifically designed to target different market segments.
Credit to: Khmer Times, Publish on 05 January 2023