448 businesses benefit under credit guarantee scheme

448 businesses benefit under credit guarantee scheme

The Credit Guarantee Corporation of Cambodia (CGCC) has supported 448 businesses by providing credit guarantees for their loan applications, amounting to $45.5 million as of May 31, according to latest data.

The total loan amount included both national and foreign currencies with 19.8 billion riels and 40.56 million dollars. The loan sizes were in the range of $6,000 to $1 million. Letters of guarantee for 343 working capital loans, 103 investment expansions and two capital expenditures were provided, according to a CGCC release.

The CGCC was established by the government in September 2020 as a state-owned enterprise under the technical and financial guidance of the Ministry of Economy​ and Finance.

The scheme is designed to help businesses that have good potential to receive bank loans even if they don’t have any collateral. It provided a merit-based opportunity for Small and Medium Enterprises (SMEs) and Micro and Small Medium Enterprises (MSMEs).

CGCC’s CEO Wong Keet Loong told Khmer Times that a credit guarantee is a financial instrument that supports both the financial institutions and the small enterprises.

For SMEs and MSMEs, it improves financial inclusion. It enables them to borrow without having the burden of providing collateral whenever their business capacity grows and they have higher loan requirements.

“Small business owners can obtain loans at affordable rates under the scheme. By having access to borrowing, business owners are able to scale up their businesses. We hope to reduce poverty to a certain extent through this,” Loong said.

CGCC launched the $200 million Business Recovery Guarantee Scheme (BRGS) in March 2021 to support businesses including MSMEs as well as large firms by enhancing their access to formal loans from the Participating Financial Institutions (PFIs) for working capital investment and business expansion.

The scheme is available until the end of this year and the guaranteed loans will be disbursed through the PFIs on a first-come-first-served basis.

Article credit to: Khmer Times, 06 June 2022