Credit guarantee helped firms to survive pandemic
August 19, 2022Latest News
Various credit guarantee schemes have played a crucial role in strengthening entrepreneurship and enhancing financial inclusion in Cambodia, especially during the Covid-19 crisis, through smooth disbursal of loans, said top officials who gathered yesterday for a conference on ‘Credit Guarantee Schemes’ Potential to Strengthen SME’s Financial Inclusion in Cambodia.’
Wong Keet Loong, CEO of the Credit Guarantee Corporation of Cambodia (CGCC) said it was incorporated on November 3, 2020, with two main policy frameworks. First to help viable businesses by providing access to formal financing and second to ensure sustainability for the CGCC’s operations.
The conference, jointly organised by the Ministry of Economy and Finance (MEF) and CGCC, aimed to raise awareness of credit guarantee benefits for SMEs.
Wong said that 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), in September 2021 and the Women Entrepreneurs Guarantee Scheme (WEGS) in April 2022, besides the extension of the CFGS to tourism. “Each scheme was specifically designed to target different market segments,” he said.
He added that CGCC has succeeded to expand its guarantee scheme all over the country, even in the remotest provinces, thanks to the vast branch networks of the participating financial institutions (PFIs). “However, more still needs to be done to ensure that financial inclusion is improved for different groups of businesses across the country,” Loong said.
“We also see a positive trend among the female borrowers, who get loans without collateral. There were only 43 women-owned SME who borrowed in 2021, but by the end of July 2022, there are 197 of them. This was due to the PFIs’ women-supported loan products and CGCC’s efforts in reaching out to more women-owned SMEs for uncollateralized loans,” he noted.
As of now, CGCC has 23 PFIs with more than 1,000 branches across the country, yet only 18 PFIs have applied for credit guarantees so far. “I firmly believe that this conference could raise awareness among all the stakeholders about the benefits and potential of credit guarantee. I am looking forward to seeing more credit guarantee requests by PFIs after this event,” Loong said.
Ros Seilava, Secretary of State of Ministry of Economy and Finance and Chairman of CGCC, said that the CGCC has so far provided a credit guarantee for $57 million loans disbursed by PFIs.
Based on data from the World Bank, 41 countries have launched 57 credit guarantee schemes during the Covid-19 crisis in 2020 to boost lending from financial institutions to businesses through risk sharing.
Credit to Khmer Times: August 18, 2022