Posted on by Sorn Chhorvyvatey
Category: Latest News
CGCC Provides $174 million Credit Guarantees to 2,070 Businesses as of February
The Credit Guarantee Corporation of Cambodia (CGCC) has provided credit guarantees of $174 million as of February this year to 2,070 businesses as their working capital for expansion.
In a factsheet issued on Monday, CGCC said as of February 29, 2024, the outstanding guaranteed loan was $120 million while the outstanding guaranteed amount was $86.9 million.
There are 1,918 micro, small and medium enterprises (MSMEs) and 152 large businesses in Cambodia, the report said, adding that 881 of businesses were women-owned.
The CGCC scheme involves 27 participating financial institutions (PFIs) to extend credit as working capital investment and business expansion to SMEs.
Established in November 2020 with a state budget of $200 million, the CGCC is the preferred credit guarantee institution in Cambodia set up to improve financial inclusion and develop the growth of SMEs.
Smooth loan distribution has boosted entrepreneurship and financial inclusion, said Mey Vann, Secretary of State at the Ministry of Economy and Finance.
“The CGCC has played a key role in serving the needs of SMEs in Cambodia, which are struggling in the wake of the Covid-19 pandemic and the inflation crisis, and need credits from banks for their businesses,” he said.AKP
Credit to: Khmer Times, Published on 19 March 2024
CGCC Provides $170M Credit Guarantees to nearly 2,000 Businesses
The Credit Guarantee Corporation of Cambodia (CGCC) has provided credit guarantees of $170 million as of January this year to 1,977 businesses as their working capital for expansion.
In a factsheet issued on Feb. 20, CGCC said as of January 2024, the outstanding guaranteed loan was $119 million while the outstanding guaranteed amount was $85.8 million.
There are 1,854 micro, small and medium enterprises (MSMEs) and 154 large businesses in Cambodia, the report said, adding that 833 of businesses were women-owned.
The CGCC scheme involves 27 participating financial institutions (PFIs) to extend credit as working capital investment and business expansion to SMEs.
Established in November 2020 with a state budget of $200 million, the CGCC is the preferred credit guarantee institution in Cambodia set up to improve financial inclusion and develop the growth of SMEs.
Smooth loan distribution has boosted entrepreneurship and financial inclusion, said Mey Vann, Secretary of State at the Ministry of Economy and Finance.
“The CGCC has played a key role in serving the needs of SMEs in Cambodia, which are struggling in the wake of the Covid-19 pandemic and the inflation crisis, and need credits from banks for their businesses,” Mey Vann said.AKP
Credit to: Khmer Times, Published on 21 February 2024
CGCC hosted Annual Seminar on ‘Diversifying Credit Guarantee Mechanism for Sustainable Financing of MSMEs’
The Ministry of Economy and Finance (MEF) and the Credit Guarantee Corporation of Cambodia (CGCC) co-organised the CGCC Annual Seminar on “Diversifying Credit Guarantee Mechanism for Sustainable Financing of MSMEs” on January31, 2024.
The event at Sofitel Phnom Penh Phokeetra was presided over by H.E. Ros Seilava, Secretary of State at the Ministry of Economy and Finance, high representative of Deputy Prime Minister,Minister of Economy and Finance, H.E. Dr. Aun Pornmoniroth.
At the seminar, H.E. Ros Seilava–launched “CGCC as the First Cambodian Bond Guarantor” and bestowed the MEF’s Outstanding Awards to participating financial institutions.
These included Canadia Bank, Sathapana Bank, ABA Bank, LOLC Microfinance and AMK Microfinance, which have disbursed the most guaranteed accounts,while ABA Bank was honoured witha Special Award for maintaining the best “Asset Quality in Guaranteed Loans in 2023”.
CGCC also launched the “Entrepreneurship Program Initiative of CGCC” (EPIC), its flagship capacity-building programme to promote greater entrepreneurship and financial literacy among micro, small and medium enterprises (MSMEs).
The seminar discussed several important topics, including the government’s policies on credit guarantees, presented by a representative of the National Bank of Cambodia (NBC), international experiences in credit guarantees, and bond guarantees by the Korea Credit Guarantee Fund (KODIT) and GuarantCo from Singapore.
There was also a panel discussion on benefits and opportunities regarding Guaranteed Bonds in Cambodia’s capital market development.
The panellists included representatives from the Securities and Exchange Regulator of Cambodia (SERC), the Cambodia Association of Securities Firms, Forte Group, and the Credit Guarantee and Investment Facility (CGIF) from the Philippines.
CGCC is a state-owned enterprise under the financial and technical guidance of the MEF with a main mission of providing credit guarantees to improve financial inclusion and support the development of small and medium enterprises.
Credit to: The Phnom Penh Post, Published on 14 February 2024
For more info, please visit: https://www.cgcc.com.kh/en/article/14014/.
Post-Covid recovery sees women-led businesses on the uptick
In 2020, entrepreneur Bopha Pen found herself at a crossroads, when Covid hit her business. She’d started Rithypul in 2012 to increase financial awareness in the country.
But by 2020, her business did not have sufficient working capital for day-to-day operations. When she sought a bank loan, the property collateral proved insufficient, till the Credit Guarantee Corporation of Cambodia (CGCC) stepped in. CGCC guaranteed her loan with one of its partner financial institutions CAMMA Microfinance and the startup Rithypul managed to tide over Covid.
Bopha, now continues to run Rithypul and has launched training centres and a fintech mobile app – Kotluy.
She told CGCC in its monthly newsletter that the fresh capital helped her “meet marketing, advertising, and overall business operation costs. We have expanded our business with more staff and customers.”
Another unique, woman-led business that has benefitted from CGCC’s loan guarantee is Thida Kheav’s SOGE. SOGE, which expanded to Solar Green Energy (Cambodia) Co., is a renewable energy semiconductor manufacturer. Since manufacturing requires upfront heavy capital outlay, CGCC stepping in has proved effective for this business too.
And women like Bopha Pen and Thida Keav are one of hundreds of such women beneficiaries. CGCC has guaranteed business loans to as many as 811 women entrepreneurs as of December 31, 2023; which forms about 42 percent of its overall loan portfolio.
And this has been a steady growth. CGCC which launched its first loan guarantee scheme in 2021 – had 23 percent of its total borrowers being women in 2021. This number increased to 35 percent of total borrowers in 2022; and by 2023 women business were as much as 42 percent of CGCC’s total loan portfolio.
At CGCC’s annual seminar on Wednesday, titled “Diversifying credit guarantee mechanism for sustainable financing of MSMEs,” H.E. Ros Seilava, Secretary of State of Ministry of Economy and Finance, high representative of H.E.Deputy Prime Minister, Minister of Economy and Finance of Cambodia, told the Khmer Times that “CGCC is proud of the gender diversity in its portfolio. We feel 42 percent of loans being given to women is a substantial number. We will continue supporting women-led businesses.”
CGCC currently has five loan guarantee schemes, namely the Business Recovery Guarantee Scheme (BRGS), the Co-Financing Guarantee Scheme (CFGS), the Co-Financing Guarantee Scheme for Tourism (CFGS-TR), Portfolio Guarantee Scheme (PGS) and the Women Entrepreneurs Guarantee Scheme (WEGS).
To close the gender gap, CGCC has designed WEGS such that banks and microfinance institutions are incentivised to lend more to women. Under WEGS, CEGS gives a higher guaranteed coverage (higher percentage of the loan being guaranteed) and lower fees (since a few percentage points make a huge difference when it comes to taking bank loans).
Anyone familiar with bank loans is probably aware that documentation is the most arduous part of the loan application. To reduce the documentation work involved, CGCC has launched a portfolio guarantee scheme (PGS). Under the PGS, banks and MFIs can bundle together loans that are similar and get the guarantee approval on the bundle – rather than for each loan. For what loans can be bundled together like this – CGCC has drawn up with its partner financial institutions a mutual agreement. Being pre-agreed, banks and MFIs can now enroll multiple loans in PGS to get faster-guaranteed approval.
Credit to: Khmer Times, Published on 06 February 2024
CGCC Receives Premier khAAA Rating, Spearheading Bond Market Confidence in Cambodia
Cambodia Investment Review
The Credit Guarantee Corporation of Cambodia (CGCC) has been recognized with a khAAA rating by the Rating Agency of Cambodia (RAC). This accreditation, recognized by the Securities and Exchange Regulator of Cambodia (SERC), signifies CGCC’s “Extremely strong capacity to meet financial commitments,” backed by the potential support of the Royal Government of Cambodia.
This rating marks a new moment for CGCC, recently accredited as Cambodia’s inaugural Bond guarantee institution by SERC. The move is strategically aimed at propelling the bond market’s growth, infusing it with newfound confidence. Following its accreditation, CGCC sought a credit rating from RAC and was subsequently honored with a khAAA rating and a stable outlook. This development is set to elevate the stature of corporate bonds under CGCC’s guarantee, instilling enhanced confidence among bond investors, encompassing financial institutions and insurance companies.
CGCC A Linchpin In Developing Cambodia’s Bond Market
H.E. Sou Socheat, the Director General of SERC, hailed this achievement, recognizing CGCC as a linchpin in Cambodia’s bond market. “CGCC’s rating underscores the firm’s robustness and ignites a culture of rating that fosters public trust. It also underscores the company’s dedication and proactive engagement in our bond market,” he remarked.
Mr. Wong Keet Loong, CGCC’s Chief Executive Officer, expressed his gratitude for this recognition. “Receiving the khAAA rating from RAC is a testament to our financial strength, enabling us to support larger SMEs in sourcing funds through bonds to expand their ventures. CGCC remains committed to bolstering economic development and fortifying trust and confidence among our partners,” he stated.
Under the guidance of the Ministry of Economy and Finance, CGCC has crafted a “Policy Framework on Bond Guarantee.” This framework received the highest endorsement from the Deputy Prime Minister, Minister of Economy and Finance, on May 17, 2023. In a subsequent move on August 22, 2023, SERC accredited CGCC as a bond issuance guarantor, a strategic initiative to bolster local firms in fundraising and nurturing the securities sector in Cambodia.
CGCC’s bond issuance guarantee service is poised to invigorate local company issuances, magnetize investors to corporate bonds, enhance the liquidity of the Khmer Riel, and uplift corporate bonds’ credit ratings. CGCC stands as Cambodia’s sole credit guarantee corporation, established under the auspices of Hun Sen and operating with the technical and financial support of the Ministry of Economy and Finance. Its core mission is to extend credit guarantees, fostering financial inclusion and catalyzing the growth of SMEs across Cambodia.
KhAAA – A Cambodian-Specific Credit Rating
The authorization of RAC by SERC in 2022, a collaboration between the Royal Group and 3E:Fii Capital, marked a significant stride in developing Cambodia’s capital markets. Credit ratings, symbolized by codes like AAA, BB, and CC, reflect the creditworthiness of corporate or government bonds, with higher ratings typically attracting lower interest rates due to perceived lower risks.
With the operationalization of RAC, Cambodian entities can now obtain a nation-specific credit rating, such as ‘khAAA’ or ‘khBB,’ essential for all listings on Cambodia’s Securities Exchange. This move dovetails with the regulator’s plan to introduce a dual ‘Khmer’ and ‘Global’ rating system, positioning Cambodia’s sovereign rating at AAA within the local category.
As Cambodia steps into this new era of financial sophistication, CGCC’s khAAA rating not only represents a landmark achievement but also heralds a new chapter of confidence and growth for the nation’s burgeoning bond market.
Credit to: Cambodia Investment Review, Published on 23 January 2024
State-run CGCC graded khAAA, making way for bond market expansion
The state-owned Credit Guarantee Corporation of Cambodia (CGCC) has been rated khAAA by the Rating Agency of Cambodia (RAC), after its accreditation by the Securities and Exchange Regulator of Cambodia (SERC), making it the first debt securities guarantee institution in the country, enabling it to support local companies in issuing bonds.
The initiative aims to increase the liquidity of the Khmer riel through the issuance of financial instruments and enhance the credit rating of corporate bonds.
The move is part of a broader strategy to stimulate the sector’s development by fostering greater market confidence.
Wong Keet Loong, CEO of CGCC, said the khAAA rating enables them to assist small and medium-sized enterprises (SMEs) in need of additional funds through debt securities issuance in the capital market.
“The rating demonstrates the CGCC’s financial capacity to assist larger SMEs capable of issuing bonds to secure funding for their business expansion. CGCC remains instrumental in fostering economic development and in strengthening the trust and confidence of our partners,” he said.
SERC director-general Sou Socheat confirmed that the corporation’s rating allows it to aid other companies in issuing bonds on the Cambodia Securities Exchange (CSX).
“CGCC is a guarantor in the Cambodian bond market and its rating indicates the company’s soundness. Moreover, CGCC’s rating starts the culture of rating in the market, building public confidence and showcasing the company’s commitment and willingness to actively engage in our bond market,” he explained.
The corporation formulated a policy framework on bond guarantee and received endorsement from the Ministry of Economy and Finance on May 17, 2023.
On August 22, SERC accredited CGCC as a bond issuance guarantor, supporting local companies and aiding the growth of the Kingdom’s securities sector.
Established under sub-decree No 140/ANKR/BK on September 1, 2020, the corporation launched its $200 million Business Recovery Guarantee Scheme (BRGS) on March 29, 2021 in a bid to broaden access to formal loans from participating financial institutions (PFIs) for working capital, investment and business expansion purposes, according to CGCC.
As of December 22, the corporation’s outstanding loans amounted to $113.96 million, with a non-performing loan (NPL) ratio of 5.41. Total claim payouts stood at $123,336.
The corporation has supported 1,731 micro, small and medium enterprises (MSMEs) along with 149 larger firms, as per CGCC.
Credit to: The Phnom Penh Post, Published on 22 January 2024
CGCC rated khAAA by Rating Agency of Cambodia
Credit Guarantee Corporation of Cambodia (CGCC) has been rated khAAA by the Rating Agency of Cambodia (RAC), a credit rating agency accredited by the Securities and Exchange Regulator of Cambodia.
This rating indicates that CGCC has an “extremely strong capacity to meet financial commitment” with the likelihood of support from the Royal Government of Cambodia.
CGCC was recently accredited as the first Bond guarantee institution in Cambodia by the Securities and Exchange Regulator of Cambodia (SERC) to help boost the bond market development in Cambodia by building more market confidence.
After obtaining the accreditation from SERC, CGCC has applied for a credit rating from RAC. As a result, CGCC was rated khAAA with stable outlook. This will enhance the rating of the corporate bonds guaranteed by CGCC and bring more confidence for bond investors, including financial institutions and insurance companies.
Sou Socheat, delegate of the Royal Government in charge as Director General of the SERC said, “CGCC is a guarantor in Cambodia bond market and its rating indicates the soundness of the company. In addition, the rating of CGCC demonstrates and commences the culture of rating to build more confidence from public and it also shows the commitment and the willingness of the company to actively participate in our bond market.”
Wong Keet Loong, Chief Executive Officer of CGCC, said, “We are honoured to receive the khAAA rating from RAC. This rating reflects the financial capability of the company to support larger SMEs who can issue bonds to source funding to expand their business. CGCC continues to play a vital role in supporting economic development and further enhancing the trust and confidence of our partner.”
Under the policy direction from the Ministry of Economy and Finance, the CGCC has developed a “Policy Framework on Bond Guarantee” and has received the highest approval from Deputy Prime Minister, Minister of Economy and Finance, on this policy framework on May 17, 2023.
On 22 August 2023, the Securities and Exchange Regulator of Cambodia (SERC) issued an accreditation letter to CGCC as a guarantor for bond issuance to support local companies raising funds and the development of the securities sector in Cambodia.
The guarantee on bond issuance service of CGCC can provide further support to encourage bond issuances by local companies, attract investors to invest in corporate bonds, increase the liquidity of Khmer Riel from the bond issuance and improve the credit rating of corporate bonds.
CGCC is the only credit guarantee corporation in Cambodia, established by the decision of former Prime Minister Hun Sen, as a state-owned enterprise under the technical and financial guidance of the Ministry of Economy and Finance.
The primary mission of CGCC is to provide credit guarantees to improve financial inclusion and support the growth of SMEs in Cambodia.
Credit to: Khmer Times, Published on 22 January 2024
CGCC Issued Guarantee Letters for Loans Worth over $159M
Serving as a key pillar of support for the businesses in distress across the Kingdom, the Credit Guarantee Corporation of Cambodia (CGCC) issued 1,880 letters of guarantee for loans worth $159.69 million until November 30 last year, according to the organisation’s latest factsheet.
The CGCC is the preferred credit guarantee institution in Cambodia set up to improve financial inclusion and develop the growth of SMEs. Established in November 2020 with a state budget of $200 million, its mission has been to provide credit guarantees to lenders on loans made to businesses based on international standards alongside sharing the risk with lenders and improving financial inclusion.
Through its various initiatives and programmes, the organisation has extended its support to over 1,700 micro, small and medium enterprises (MSMEs) and more than 150 larger firms, and contributed towards fostering employment and income opportunities. Studies reveal CGCC initiatives have directly contributed towards financial inclusion as well as poverty reduction.
The CGCC scheme involves 27 participating financial institutions (PFIs), which extend credit as working capital investment and business expansion to SMEs.
As per the CGCC factsheet, the outstanding guaranteed loan stood at $113.96 million while the outstanding guaranteed amount was $82.12 million. The Non-Performing Loan (NPL) ratio of the outstanding guaranteed amount remained at 5.41 percent and the claim payout stood at $123,336.
The organisation’s spectrum of activities was widened when the Securities and Exchange Regulator of Cambodia (SERC) under the Non-Bank Financial Services Authority of the Ministry of Economy and Finance accredited the CGCC as the country’s first guarantor for bond issuance to support local companies in raising funds last October.
The SERC issued a formal letter to accredit CGCC as Cambodia’s first bond issuance guarantor on August 22, 2023, which according to experts, will play an important role in the development of the securities sector in the country.
The CGCC has developed a policy framework on bond guarantee that was approved by the Deputy Prime Minister and Minister of Economy and Finance Aun Pornmoniroth on May 17, 2023, in response to the sustainable development of Cambodia’s financial market through the company’s delivering guarantee on bond issuance services to corporations to raise funds for business development.
“The guarantee on bond issuance service can provide further support to encourage bond issuance by local companies, attract investors to invest in corporate bonds, increase the liquidity of riel from the bond issuance and improve the credit rating of corporate bonds, in which response to the sustainable development of the financial market,” a SERC statement said.
The organisation has been receiving technical support from the Asian Development Bank (ADB), World Bank, and UN Capital Development Fund (UNCDF) ever since it launched the first guarantee scheme on 29 March 2021.
Te Taing Por, President of the Federation of Association for Small and Medium Enterprises of Cambodia (FASMEC), earlier told Khmer Times that the CGCC guarantee ensures easy credit for SMEs and a bigger market for their products.
“Credit guarantee from the Credit Guarantee Corporation of Cambodia is an opportunity for small and medium-sized enterprises, members of FASMEC, who are facing a lack of collateral to access financing to expand their business,” Taing Por had said.
The CGCC has also been providing support to SMEs on capacity building, consulting, technical and information backup under the credit guarantee framework.
Credit to: Khmer Times, Published on 01 January 2024
$150M in Loans Guaranteed for SMEs by CGCC
As of November 30, the state-owned Credit Guarantee Corporation of Cambodia Plc (CGCC) has issued a total of 1,880 Letters of Guarantee (LG) for loans worth $159.69 million. The guarantees were in support of small- and medium-sized enterprises (SMEs) affected by the Covid-19 pandemic.
According to figures released on December 22, the total of outstanding loans equal $113.96 million, with a non-performing loan (NPL) ratio of 5.41. Total claim payouts came to $123,336. The businesses supported included 1,731 micro, small and medium enterprises (MSMEs), and 149 larger firms.
Mey Vann, secretary of state at the Ministry of Economy and Finance, recently explained that SMEs have played an important role in supporting Cambodia’s socio-economic development. They contributed to the reduction of poverty by 50.2 per cent in 2003 to just 17.8 per cent in 2020, by increasing employment and income for Cambodians.
He said the CGCC was established to share risks with financial institutions, in order to increase the accessibility of loans to businesses, especially SMEs.
“The government considers that the use of the state budget to support financing through the credit guarantee mechanism has the first major advantage of a ‘Leverage Effect’. By using the capital of the CGCC to secure rotating loans, the capital is used only when a secured loan is lost. The state budget of $200 million provided by the CGCC supports the issuance of loans with a far greater value,” he said.
“Second, it serves as a ‘Countercyclical Crisis Tool’ by maintaining market confidence, especially during a crisis, to balance economic activity,” he added.
Toch Chaochek, CEO of Cambodia Post Bank Plc (CPBank), a CGCC partner, explained that SMEs which are correctly registered and seek loans with the assistance of the CGCC are less risky creditors than their counterparts that do neither.
The National Bank of Cambodia expressed support for lending to smaller businesses, noting that the benchmark risk weight was reduced to 75 per cent for properly registered SMEs that could produce appropriate financial statements.
The CGCC was established by Sub-Decree No 140/ANKR/BK on September 1, 2020, and its $200 million Business Recovery Guarantee Scheme (BRGS) was launched on March 29, 2021 in a bid to widen access to formal loans from participating financial institutions (PFI) for working capital, investment and business expansions.
In early January, the finance ministry announced the ongoing BRGS to MSMEs, as well as large enterprises. The project will continue until the initial capital of $200 million is gone.
Credit to: The Phnom Penh Post, Published on 25 December 2023