CGCC and DGB Bank signed the partnership of credit guarantee agreement to provide more support for business loans that lack of collateral
September 23, 2022Events and Activities
(Phnom Penh, 22 September 2022): Credit Guarantee Corporation of Cambodia (CGCC) and DGB Bank has entered into a partnership on a credit guarantee agreement to expand support for businesses in all levels, ranging from micro to large firms in Cambodia that lack collateral in accessing to formal loans for their businesses with CGCC’s guarantees.
As a state-owned enterprise, operated under the technical and financial guidance of the Ministry of Economy and Finance (MEF), CGCC has launched credit guarantee schemes to enhance easier access to finance despite collateral challenges and provide the most support to SMEs, aligning with government strategy in SMEs development. Under this partnership agreement, DGB Bank becomes one of the 24 CGCC’s Participated Financial Institutions (PFIs) in providing guaranteed loans to businesses, especially SMEs that lack collateral for their working capital and business expansion.
Chief Executive Officer of CGCC, Mr. Wong Keet Loong mentioned that “The volume of guaranteed loans over the last 6 months has been increasing. This indicates that the credit guarantee has supported SMEs in obtaining loans to grow their business. Our participating FIs are able to share the risks of the loans with CGCC.”
Mr. Wong added that “The collaboration with DGB Bank further reinforces our outreach to support more SMEs throughout the DGB branch network. We are glad that DGB finds the benefits of the credit guarantee to support their loan growth and risk weight.”
Chief Executive Officer of DGB Bank, Mr. Oul Dethsokhom said that “DGB bank is very excited of being able to sign the credit guarantee agreement with CGCC. With credit guarantee, the bank can take part in supporting businesses growth in the country and Cambodia’s economy in the ASEAN region”.
Mr. Oul Dethsokhom continued that “We were poised to enter into another government-led credit guarantee scheme dedicated to supporting SME business which could not procure funding source its own collaterals/guarantee.”
This joint force between CGCC and DGB Bank will enable businesses, especially SMEs, to have greater access to loans for their business growth by increasing borrowing capacity with the risk-sharing of credit guarantee schemes. It allows SMEs to borrow even without collateral and to get a higher loan amount with the same collateral value than they would otherwise get without a credit guarantee.
CGCC is a state-owned enterprise operated under the technical and financial guidance of the Ministry of Economy and Finance (MEF) and officially incorporated in November 2020. CGCC’s mission is to provide credit guarantees to lenders on loans made to businesses based on international standards to share the risk with lenders and to improve financial inclusion.
As of 31 August 2022, CGCC has supported 661 businesses by providing credit guarantees for their loan applications, amounting to USD 64.8 million equivalent. CGCC has provided the most guarantee to SMEs, which accounts for 95% of the total businesses receiving the credit guarantee from CGCC.
About DGB Bank
DGB was “inaugurated as commercial bank” on September 01, 2021, with esteemed virtual participation from CEO of Daegu Bank and top management of the Bank. Throughout the year, the Bank unveiled four flagship products: deposits (CASA), remittance (domestic & Oversea), DGB Mobile app and ATMs services.
The Bank has, in line with the NBC’s Prakas, lent hands to the clients by undertaking the plight of loan restructures, easing their grim burden during financial predicament.