Understanding Credit Guarantee-Interview with Sathapana Bank
January 19, 2023Understand Credit Guarantee
Read and Download in PDF: Hear from our PFIs_Interview with Sathapana Bank
1. What is your bank perspective toward the credit guarantee schemes in Cambodia and what encourage Sathapana to join as CGCC’s PFI?
Credit guarantee scheme is important in filling the financing gap for SMEs. The scheme provides credit risk mitigation to Sathapana Bank. This, in turn, helps us to extend loans to SMEs which contribute significantly to the economy of Cambodia. The Credit Guarantee of Cambodia (CGCC) therefore plays a crucial role in supporting credit access for SMEs in the country.
2. After signing a partnership with CGCC and becoming one of the most supportive CGCC’s PFIs in disbursed guaranteed loans, how do the credit guarantee schemes benefit the bank and your customers?
Majority of the lending products in Cambodia are secured loans. We saw working with CGCC as a good opportunity for us to extend our support to our customers who require funding to help their business grow with no collateral needed. The scheme allows us to innovate and provide a 100% hard collateral-free loans to business owners. We are proud to be the first bank to do so. As of September 2022, more than USD12 million of loans have been booked under Credit Guarantee Scheme. For our clients, the scheme gives them the opportunities to continue growing their business with better access to financing.
3. What motivates Sathapana to initiate the uncollateral loan product “Business Installment Loan Program (BIL)” that is 100% unsecured loans for borrowers with the capacities to repay but lack of collateral?
In Cambodia, FIs are mainly lending against hard collaterals. Access to credit will be curtailed for business owners who do not have hard collateral to provide to FIs to secure the loans. We believe this represents a large segment of the market. Our goal is to help them to gain access to financing to help them grow while managing our credit risks.
4. Recently, CGCC, Sathapana and two other partners have jointly organized a flagship training program called “I am Financially Literate (IFL)”, how does this program support SMEs and drive more growth to their businesses including access to financing?
IFL is an executive program initiated by Sathapana Bank in a joint partnership with CGCC and two other partners. The program aims to promote and improve financial literacy for women entrepreneurs and business owners through practical training sessions. The training includes project management, operation handling, financial management, marketing, and sales. Through IFL, participants are better equipped with making financial assessments and the know-how in getting access to financing.
5. As currently, Sathapana Bank’s momentum in disbursing unsecured loans for businesses under CGCC’s guarantee is moving fast, what is the future plan/strategy of Sathapana Bank for further expanding the usage of credit guarantees all over Cambodia?
In line with the government strategy to support the tourism sector to recover from the pandemic, we are working on a program with CGCC to support the recovery scheme. In addition to this program, we are launching a few initiatives country-wide to support clients in supply chain, leveraging on our extensive branches network.
6. As the credit guarantee topic is still considered as a new topic in Cambodia, what should Sathapana Bank and CGCC do to raise awareness of credit guarantees to the borrowers?
Through IFL, Sathapana Bank and CGCC are reaching out to customers who need to help grow their businesses. This is one of the few initiatives that we are working together to create more awareness and promotion of the credit guarantees to our customers who are looking for financing but are not sure how and what are their options. We can also personalize our message and communicate the benefits of our BIL program and scheme to the meet the needs of customers from different geographical locations and industries.