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Tag: business recovery guarantee scheme

New Project Boosts 100 Fisheries Enterprises

Posted on by Sorn Chhorvyvatey

A new scheme by the EU-funded CAPFISH-Capture programme aims to support the Kingdom’s post-harvest fisheries sector by improving access to capital.

Through CAPFISH, the Fisheries Administration (FiA), the UN Industrial Development Organization (UNIDO) and the Credit Guarantee Corporation of Cambodia (CGCC) will work together to launch an investment support facility (ISF) scheme.

Building on the success of its current investment support of 50 small enterprises, the ISF scheme will provide technical support and guaranteed business loans to 100 additional businesses.

The funding will allow the small enterprises to overcome challenges such as inadequate fish-processing technologies and limited value addition, as well as food safety concerns which impact consumer trust and the sector’s competitiveness on a global scale, according to a joint statement from the CAPFISH and its partner organisations.

The scheme blends co-financing from the enterprises’ own resources, guaranteed business loans distributed by the local financial institutions and grant support from the project itself. It is co-funded by the EU.

“The ISF will play a pivotal role in enhancing Cambodia’s fisheries sector. Through it, eligible enterprises will be able to access technical support, capacity building, and financial assistance, including grants and loans with favourable conditions,” Mey Vann, member of the CGCC board of directors, was quoted as saying in the statement.

“Ultimately, these efforts will contribute to the government’s overarching goal of securing food supplies and elevating the standard of living for the Cambodian people,” he added.

Dejene Tezera, UNIDO director of agri-business​​ and infrastructure development, expressed his pride in the introduction of the scheme.

“Through investments in innovation and capacity building, we are paving the way for a future where Cambodian fisheries stand tall on the world stage, delivering excellence, reliability, and prosperity to local communities and beyond,” he said.

“The ISF will not only help boost competitiveness and sustainability but also underpin economic expansion, public health safeguards and local job creation. I am optimistic that its success will inspire replication and scale up in other agricultural sub-sectors,” added EU ambassador Igor Driesmans.

In the statement, Dith Tina, Minister of Agriculture, Forestry and Fisheries, acknowledged the invaluable support of the EU and UNIDO.

“This is a great initiative and will support current collaborations between the ministry’s FiA, UNIDO and the private sector,” he was quoted as saying.

“I am positive that this project, which will be implemented by the CAPFISH-Capture programme, will raise the standards and quality of post-harvest fishery products, providing economic benefits to fishermen and the owners and employees of processing enterprises,” he added.

Credit to: The Phnom Penh Post, Published on 29 May 2024

MAFF and Partners Launch $7 mil Fisheries Project

Posted on by Sorn Chhorvyvatey

The government and its development partners, through the Cambodia Programme for Sustainable and Inclusive Growth in the Fisheries Sector (CAPFISH-Capture), launched an Investment Support Facility (ISF) project with $7 million in funds for boosting Cambodia’s fisheries sector yesterday.

The European Union (EU)-funded CAPFISH-Capture Programme and its Post-harvest Fisheries Development project, the Fisheries Administration (FiA) of the Ministry of Agriculture, Forestry and Fisheries (MAFF), the United Nations Industrial Development Organization (UNIDO), and the Credit Guarantee Corporation of Cambodia (CGCC) are joining forces to embark on and fund a groundbreaking ISF scheme aimed at catalysing growth in the post-harvest fisheries sector.

The partners released a joint statement yesterday, “With its rich fisheries resources and cultural heritage, Cambodia holds great promise for excelling in the global fish and fishery products market”.

“However, post-harvest fisheries face challenges such as inadequate fish-processing technologies, limited value-addition, and food safety concerns which are impacting consumer trust and the sector’s competitiveness on a global scale,” it said.

“Building on the success of its current Value Chain Investment Support (VCIS), the project has designed the ISF scheme to support post-harvest fisheries enterprises and their input suppliers in overcoming these challenges and enhancing productivity, product safety, and quality,” it said.

“This scheme blends co-financing from the enterprises’ own resources, guaranteed business loans distributed by the local financial institutions, and grant support from the project,” it added.

“This new scheme is supported by a fund of $7 million and targets over 100 eligible enterprises in the fisheries value chain in addition to the 50 enterprises already supported by the project,” it added.

The project launch was chaired jointly by Igor Driesmans, EU Ambassador to Cambodia, and Dith Tina, Minister of Agriculture, at Sofitel Phnom Penh Phokeethra Hotel, yesterday.

Driesmans lauded the timely launch of the scheme, saying, “By harmonising with global market requirements, including those of the EU, the ISF will not only help boost competitiveness and sustainability but also underpin economic expansion, public health safeguards, and local job creation in the sector.”

“I am optimistic that the success of the ISF in this sector will inspire replication and scale up in other agricultural sub-sectors, catalysing holistic development, bringing more investment in the sector and prosperity,” the EU Ambassador added.

Acknowledging the invaluable support from the EU and UNIDO for bolstering food safety and fisheries’ sustainable development, Tina reaffirmed his commitment to further elevate the country’s fisheries sector to new levels of success.

In line with the government’s Pentagonal Strategy, the minister said that the ISF is a good initiative to support collaboration between the FiA, UNIDO, and the private sector to promote growth in the post-harvest fisheries sector in Cambodia.

“I am positive that this project, which will be implemented by the CAPFISH-Capture programme, will promote the processing of post-harvest fishery products to a higher standard and quality, as well as provide economic benefits to fishermen and processing enterprises,” he said.

Mey Vann, Secretary of State of the Ministry of Economy and Finance (MEF) and Member of the Board of Directors of the CGCC, said that the CGCC has been selected to manage the ISF scheme in partnership with commercial banks and microfinance institutions.

“The ISF plays a crucial role in enhancing Cambodia’s fishery sector. Through ISF, eligible enterprises in the post-harvest fishery sector will be able to access technical support, capacity building, and financial assistance, including grants and guaranteed loans with favourable conditions,” he said.

“The ISF will contribute to the national economic growth, modernisation, and development of the agricultural sector,” Vann noted.

Dejene Tezera, UNIDO’s Director of Agri-Business and Infrastructure Development, said that “We are proud to introduce the ISF scheme for this sector”.

“Based on UNIDO’s solid experience in innovative financing and value chain development, we firmly believe that this innovative financial model will elevate the value and quantity of safe, high-quality fishery products, enabling fish processors to thrive in global markets,” he said.

Credit to: Khmer Times, Publish on 30 May 2024

Meet the Business Owner Who Received a Loan Guaranteed by CGCC

Posted on by Sorn Chhorvyvatey

Agriculture is a key sector in supporting the national economic growth. Rice market also plays an important role in promoting agriculture. Chhun Thom Rice Mill was established in 1997, initially as a family business. After years of operation, customers know the brand and begin to trust our products. I have seen opportunities to expand this business, especially on technologies such as the purchase of additional rice mills and the expansion of the location of the mill.

I was introduced by ABA Bank staff about the loan guaranteed by CGCC which can provide me additional capital even without collateral. Thanks to the credit guarantee from CGCC, I was able to get more capital to expand my rice mill business.

I strongly believe that the CGCC’s credit guarantee really support my business, as well as other potential SMEs that lack collateral to get necessary capital from banks or microfinance institutions for their business expansion.

Read more: Meet the Business Owner Who Received a Loan Guaranteed by CGCC

Understanding Credit Guarantee-Interview with Participating Financial Institution (Acleda Bank)

Posted on by Sorn Chhorvyvatey

Read and Download in PDF: Interview with Participating Financial Institution (ACLEDA Bank)

 

1. What is ACLEDA Bank’s perspective towards the credit guarantee schemes and why does your bank partner with CGCC?

Credit guarantee schemes of Credit Guarantee Corporation of Cambodia “CGCC” are good and essential schemes contributing to the development of the country’s national economy by providing credit guarantees to Small-sized and Medium-sized Enterprises (SMEs), and Large Enterprises which are financially viable but with insufficient or no collateral to enable them to get official loans from ACLEDA Bank as well as other PFIs. Through the credit guarantee from CGCC, the Bank could expand credit market, promote financial inclusion and manage credit risks effectively.

ACLEDA Bank has joined and become one of the participating financial institutions (PFIs) for the following main reasons:

  • Participate with the Royal Government’s initiatives and schemes to support the country’s socio-economic development.
  • Support and encourage SMEs and Large Firms to obtain formal loans from the licensed financial institutions for both working capital and business expansion.
  • Contribute to creating employment opportunities for people through the growth of businesses obtaining the formal loans under CGCC’s credit guarantee.

 

2. How do the credit guarantee schemes benefit ACLEDA Bank and your customers?

The credit guarantee schemes offer many benefits to both ACLEDA Bank and the customers as follows:

  • For ACLEDA Bank:
    • Diversify the credit products in line with the Bank’s strategic plan.
    • Manage credit risks effectively.
    • Maintain the existing customers and attract new potential ones.

  • For the customers:

    • Offer choices to the customers and be able to get formal loans for the expansion of their business activities.
    • Improve their living conditions through the growth of businesses.
    • Have a chance to create employment opportunities for their communities and promote innovation in their products and services.

3. So far, which type of loans does ACLEDA Bank use the credit guarantees to support SMEs?

So far, ACLEDA Bank uses the credit guarantees to provide business loans, revolving facility, and overdraft facility to our customers as SMEs and Large Enterprises in both priority and non-priority sectors to meet their business needs.

 

4. How should the borrowers prepare themselves to get guaranteed loans from ACLEDA Bank?

To obtain the guaranteed loans from ACLEDA Bank, the borrowers both individuals and legal entities shall meet the following criteria:

  • Business activities operate in Cambodia and majority Cambodian-owned businesses (shareholding of more than 50%)
  • Business registration issued by the appropriate government authorities
  • Financially viable businesses and accurate financial statements
  • Have owner equity and specific business plan
  • Loan utilization in accordance with the purposes as mentioned in the credit proposal
  • Willingness to comply with the loan obligations etc.

 

5. What is the ACLEDA Bank’s strategy/plan to further expand the disbursement of guaranteed loans in 2024?

ACLEDA Bank still continues to stimulate the disbursement of guaranteed loans in 2024 through promoting credit guarantees to both existing and new customers who need financing as well as  providing the trainings and refresher courses on the knowledge of credit guarantees to all the credit-related staffs of all branches nationwide, providing technical support for credit guarantees, especially having a good collaboration with CGCC to support and enhance the growth of guaranteed loans in a sustainable manner.

 

Understanding Non-Performing Loan

Posted on by Sorn Chhorvyvatey

Never before in the last fifteen years has the banking sector in Cambodia experienced a high non-performance loan (NPL) ratio. At the end of 2023, the NPL ratio stood at 5.4% and 6.5% in the banking and microfinance sectors, respectively, compared to an average NPL ratio of 2.18% between 2009 and 2022 (Chart 1). At the same time, as of February 2024, 133 of 2,070 accounts guaranteed by CGCC have become NPL, amounting to USD 9.76 million. The percentage of cumulative non-performing guaranteed amount over the guaranteed amount is 8.02%. Despite the challenging environment, NPL is manageable, and Cambodia’s banking sector remains resilient. Understanding NPL is critical to mitigating adverse impacts on borrowers, lenders, and the economy.

What is a Non-Performing Loan?

A non-performing loan occurs when the borrowers cannot fulfill their repayment obligations due to financial difficulty, i.e, late payments of more than 30 days for short-term loans, or more than 89 days for long-term loans. The criteria for classifying loan status are different from country to country. In Cambodia, the NBC classifies loans into five categories based on the number of days past due, as shown in Table 1 below. Loans under Normal and Special Mention are performing, while loans that fall under the Substandard or worse are considered non-performing.

Read more: Understanding Non-Performing Loan

Extension of Request for Proposal “Legal Counsel”

Posted on by Sorn Chhorvyvatey

CGCC is a state-owned enterprise, established under the technical and financial guidance of the Ministry of Economy and Finance (MEF) to provide credit guarantees based on international standards to improve financial inclusion and support the growth of SMEs in Cambodia. CGCC obtained the accreditation from the Securities and Exchange Regulator of Cambodia (“SERC”) to become the bond guarantor on 22 August 2023 (“Bond Guarantor” or “Guarantor”).

CGCC wishes to provide guarantee on bonds to be listed on the Cambodia Securities Exchange.

CGCC is seeking to engage a Cambodian legal counsel (“Legal Counsel”) to perform the services as described in the scope of work.

 

CGCC and Bridge Bank Signed on Credit Guarantee Agreement to Support Businesses in Access to Guaranteed Loans

Posted on by Sorn Chhorvyvatey

On 07 February 2024, Credit Guarantee Corporation of Cambodia (CGCC) and Bridge Bank officially announced the partnership in the signing ceremony on the Credit Guarantee Agreement to provide support to micro, small, and medium enterprises (MSMEs) and large enterprises, in easier access to bank’s loans with CGCC’s Guarantee for business development.

The partnership between CGCC, a state-owned enterprise, under the financial and technical guidance of the Ministry of Economy and Finance, and Bridge Bank, a commercial bank with a commitment to support the local MSMEs, will enable Bridge Bank to expand the opportunity to be confident in providing the loans to financially viable businesses but lack of collaterals, by using credit guarantees of CGCC.

CGCC and Bridge Bank

Mr. Wong Keet Loong, Chief Executive Officer of CGCC said: “This partnership with Bridge Bank opens up a new channel for us to reach out to support the Bank’s SMEs in getting loans when they lack collateral.  Our participating FIs will evaluate the eligibility of SMEs for guaranteed loans as they know the financial needs and repayment capability of the borrowers. Our guarantees are vital to ensure the continuous supply of credit into the market to support more economic activities.”

CGCC and Bridge Bank

Mr. Richard Liew, CEO of Bridge Bank said: “SMEs are one of the backbones of Cambodia’s economy, contributing significantly to the country’s GDP growth as well as providing employment opportunities to all Cambodians. However, some of these businesses often face challenges in accessing financing to support their growth. That is where this partnership between Bridge Bank and CGCC comes in. Through this MoU, we hope to provide MSMEs with easier access to loans by leveraging CGCC’s expertise in credit guarantee services. This will help to mitigate the risk of default and enable us to offer more competitive loan rates, thus increasing the affordability of credit for MSMEs.”

Through this agreement, Bridge Bank has now become one of the 28 Participating Financial Institutions (PFIs) of CGCC, committing to assisting business entities in line with the Government’s direction to support MSMEs. CGCC and Bridge Bank strongly believe that this partnership will be one of the key instrumental in addressing the financing gap faced by many MSMEs and will contribute to the growth and development of the country’s economy.

CGCC and Bridge Bank

About CGCC

CGCC is the only credit guarantee corporation in Cambodia, established by the decision of Samdech Akka Moha Sena Padei Techo 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. Visit CGCC’s website for more information: www.cgcc.com.kh

 

About Bridge Bank

Bridge Bank provides a comprehensive range of banking products, such as loan services including home, automotive, personal, and business loans, as well as deposit services, payroll and remittance services.

Bridge Bank’s vision and mission are “to be your preferred financial partner of today and generations to come,” and “to provide financial services you can trust through our global service standards, making banking simple and secure.”

Please visit us for more details via www.bridgebank.com.kh​

Meet the Business Owner Who Received a Loan Guaranteed by CGCC

Posted on by Sorn Chhorvyvatey

Seeing that the financial awareness of Cambodian people is still limited, and their use and management of finances are not very effective, my husband and I started this company RithyPul in 2012 to spread the knowledge and share financial advice. Until 2020, our business was affected by the COVID-19, however we can still get through it until today. The most difficult factor at that time was the lack of working capital to support day-to-day business operations. At that time, we used our property as collateral to apply for a loan, but we still could not get enough capital as needed. The best solution at that time was to have a CGCC’s Participating Financial Institution, CAMMA Microfinance, advising us to apply for a CGCC guaranteed loan for our business, which would allow us to obtain a loan without collateral to use as working capital.

After obtaining guaranteed loans from Participating Financial Institution of CGGC, we are also able to address several key issues such as marketing, advertising, and overall business operation costs. We have expanded our business with more staff, and customers becoming more aware and acquainted with the use of our services has increased steadily. On the other hand, we also have more time to think about new strategies without having to worry about capital issues.

The success of a business depends on many factors, including having enough working capital, that is the most important factor for every business. We would like to thank the Government for establishing CGCC to support our business and other MSMEs on access to finance, as well as to improve financial inclusion in the country.

Read and Download in PDF: Mrs. Bopha Pen, Executive Director Rithipul Training Center

Credit Guarantees to SMEs Reach Nearly $140 Million

Posted on by Sorn Chhorvyvatey

The Credit Guarantee Corporation of Cambodia (CGCC) provided credit guarantees of $139.5 million to businesses for their working capital expansion as of July 2023.

The credit guarantee has been provided to 1,648 businesses, according to a report on Friday.

CGCC said in a statement that the total amount of outstanding guaranteed loans was $107.51 million, while the total amount of outstanding guaranteed amount was $77.48 million.

There are 1,510 micro, small and medium-sized businesses (MSME) and 138 large businesses get their loan guaranteed, the report said, adding that about 677 were women-owned.

The report stated that a significant portion of the loan guarantees were used for working capital, investment, business expansion, and capital expenditures.

CGCC, the first credit guarantee institution in the country under the Ministry of Economy and Finance, was established in August 2020, during the Covid-19 pandemic to provide timely credit to support the rehabilitation and sustainability of local businesses.

Under the CGCC’s scheme, more than 30 participating financial institutions (PFIs) participate in providing credit as working capital investment and business expansion to SMEs.

Rath Sophoan, CEO and Country Head of Maybank Cambodia, said more credit has been disbursed to SMEs as banks and SMEs have learnt from each other to find the common points of financial assessments.

“With the economy recovering to get back to normal, it is time for SME growth. It requires financing solutions and more banks will increase providing credit to SMEs as banks and SMEs have worked together to find solutions and they understand each other more,” Sophoan said at a forum on supporting SMEs on legal and financial insights for sustainable growth at Olympia City Hotel on Friday.

The credit guarantee scheme has contributed to strengthening entrepreneurship and improving financial inclusion in Cambodia by facilitating the smooth distribution of loans, 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 credit from banks for their business,” Vann said.

The government will continue to implement supportive policies through credit guarantee mechanisms to ensure the development of small and medium enterprises, he added.

Credit to: Khmer Times, Published on 21 August 2023

 

CGCC Participated in the 35th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Mongolia

Posted on by Sorn Chhorvyvatey

On 7 to 11 August 2023, CGCC Delegation, led by H.E. Ros Seilava, Secretary of State of the Ministry of Economy and Finance (MEF), and Chairman of CGCC, attended the 35th ACSIC Conference in Ulaanbaatar, Mongolia, hosted by Credit Guarantee Fund of Mongolia (CGFM), under the theme “Looking ahead: fostering green financing for sustainable development”.

CGCC Participated in the 35th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Mongolia
CGCC Participated in the 35th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Mongolia

During the conference, H.E. Chairman of CGCC gave a warm greeting remark to all the participants on credit guarantee mechanism, as a supplement to the sustainable financial state in Cambodia.

CGCC Participated in the 35th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Mongolia
CGCC Participated in the 35th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Mongolia

Moreover, Mr. KL Wong, CEO of CGCC, was also invited as a speaker to the panel discussion on “Design, Implementation and Monitoring: The Role of Credit Guarantee Schemes in Addressing the Perceived Higher Risks Associated with Green Finance Investments”.  In this panel discussion, Mr. KL Wong shared the progress of CGCC in developing a guarantee scheme to support green financing for sustainable development by collaborating with various government ministries and development agencies in supporting the country’s commitment to participate in reducing GHG emissions by about

CGCC Participated in the 35th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Mongolia
From Left to Right: Mr. Tsogtsaikhan Sarantuya, Chairman of the 35th ACSIC Conference and Acting Executive Director of Credit Guarantee Fund of Mongolia (CGFM), Mr. Jambaltseren Tumur-Uya, Secretary of State of the Ministry of Food, Agriculture and Light Industry and Chairman of the Board of the CGFM, H.E. Ros Seilava, Chairman of CGCC, and Mr. Wong Keet Loong, CEO of CGCC

Through this conference, delegates from members/observers also got the chance to share and exchange their respective views on respective topics around green financing for sustainable development through expert insight discussions, plenary discussions, fireside chats, panel discussions, and keynotes, in which to bring the solidarity effort toward building and developing the green financing, a key driver of positive change, as it’s not just relevant but vital in the face of current environmental challenges.

The 35th ACSIC conference was participated by approximately 120 delegates representing members/observers of ACSIC from 13 countries in Asia including Cambodia, Indonesia, India, Japan, Korea, Malaysia, Mongolia, Nepal, Papua New Guinea, Philippines, Sri Lanka, Taiwan, and Thailand.

ACSIC is the cooperation of largest Asia’s credit guarantee organization established in 1987, designed to improve the credit guarantee system, which currently is participated by 19 credit institutions of 13 Asian countries.

CGCC Participated in the 35th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Mongolia
CGCC delegates during the official meeting with KODIT delegates: Mr. Choi Won Mok, Chairperson and CEO, Mr. Youn Jung-In, Policy Advisor, Mr. Hur Seung-Wook, Chief Director
CGCC Participated in the 35th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Mongolia
CGCC Participated in the 35th Asian Credit Supplementation Institution Confederation (ACSIC) Conference in Mongolia