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CGCC Provides $174 million Credit Guarantees to 2,070 Businesses as of February

Posted on by Sorn Chhorvyvatey

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 Celebrating International Women’s Day

Posted on by Sorn Chhorvyvatey

On 06 March 2024, CGCC management and staff celebrated International Women’s Day to appreciate all CGCC female staff who have played vital roles in advancing CGCC’s development in various operational areas.

To express this appreciation, CGCC’s management presented souvenirs and organized a lunch gathering with all CGCC’s staff.

Out of 51 staff, CGCC has 21 women (41%) who work in different departments and positions.

Understanding CGCC’s Bond Guarantee

Posted on by Sorn Chhorvyvatey

In April 2022, the Ministry of Economy and Finance provided a policy direction to CGCC to diversify our guarantee service to bond guarantees. CGCC was then accredited by the Securities and Exchange Regulator of Cambodia (SERC) in August 2023 as a local bond guarantor and completed its rating procedure, and was rated “khAAA” with a Stable Outlook, the highest rating on a local scale by the Rating Agency of Cambodia. With all these set, CGCC will embark on a new journey to provide guarantees on bond issuance to support Cambodia’s capital market and the small and medium enterprises (SMEs) looking to enter the bond market for their sources of funding.

What is a bond?

A bond is a debt instrument, one of the alternatives to a bank loan. The bond issuer is a borrower, and the bond investor is a lender. Bond investors buy bonds from the issuer, who promises to pay interest (coupons) and bond principal during the bond maturity. Compared to a bank loan, a bond gives more flexibility in terms of structure, size, maturity, and interest payment. While just about any SME and individual can raise funds with bank loans as long as they can prove their repayment capacity, raising funds with bonds requires the issuer to be a more well-established and matured SME that can demonstrate good governance and business operation, reliable financial records, concrete future business plan and so on. In short, compared to bank loans, the requirements to issue bonds are stricter and more extensive. The table below gives a brief general comparison between a bank loan and a bond.

Indeed, issuing bonds is a common way for Governments and businesses to raise capital in many developed countries to finance their projects. It is not yet so much so in Cambodia. The bond market in Cambodia is still in the developing stage, facing challenges such as low liquidity, high-interest rates, and a low investor base. However, we have seen positive breakthroughs in recent years, especially in the issuance of government bonds, guaranteed bonds, and sustainable bonds. Currently, there are 9 listed corporate bond on the Cambodia Securities Exchange (CSX) raising funds between 1.5 to 30 million USD equivalent per issuance.

Read more: Understanding CGCC’s Bond Guarantee

Meet the Business Owner Who Received a Loan Guaranteed by CGCC

Posted on by Sorn Chhorvyvatey

Solar Green Energy (SOGE), established in 2008, is a company providing green energy solutions using solar energy to irrigate the crops of Cambodian farmers. Shortly after the establishment, customers began to recognize SOGE and trust our services. I saw the opportunity to expand our business. We have the technology but lack human resources and capital.

I consulted with some banks and microfinance institutions to get additional capital. Because I  didn’t have enough  collateral for the loans, J Trust Royal Bank introduced me CGCC’s credit guarantee service which can guarantee my loan so that the bank can lend me without requiring my collateral. With the credit guarantee, I could get additional capital to build new pumping stations.

SOGE used the loans guaranteed by CGCC to expand the construction of pumping stations in some provinces such as Pursat, Kampong Cham, Kampong Chhnang and Kampong Thom. The stations can irrigate about 1,600 hectares and benefit about 1,000 families.

I think that CGCC’s credit guarantees can 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

CGCC Provides $170M Credit Guarantees to nearly 2,000 Businesses

Posted on by Sorn Chhorvyvatey

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’

Posted on by Sorn Chhorvyvatey

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/.

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​

CGCC Receives Premier khAAA Rating, Spearheading Bond Market Confidence in Cambodia

Posted on by Sorn Chhorvyvatey

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.

Read more: Credit Guarantee Corporation of Cambodia Partners with Cambodia Chamber of Commerce to Hit Aim of $100M in Loans for 2023

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

Posted on by Sorn Chhorvyvatey

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