Guarantee Archives

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

Posted on May 8, 2024June 14, 2024 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.

Meeting Between CGCC ADB, and GGGI exploring the collaboration on Cambodian Green Sustainable Financing

Posted on December 6, 2023December 7, 2023 by Sorn Chhorvyvatey

On 06 December 2023, CGCC, led by Mr. Wong Keet Loong, CEO of CGCC, met with the Asian Development Bank (ADB), and the Global Green Growth Institute (GGGI) to discuss on GGGI’s Switch Garment Project to promote sustainable energy practices in the Garment Sector in Cambodia.

The meeting also aimed to explore collaboration opportunities between CGCC, ADB, and GGGI to implement the Sustainable Green Financing Facility (SGFF), a blended financing facility comprising of credit guarantee, and technical assistance elements, to support sustainable development goal (SDG).

Credit Guarantees to SMEs Reach Nearly $140 Million

Posted on August 23, 2023October 19, 2023 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 2nd Town Hall Meeting 2023 on “Milestones in Q2 2023 and Strategy Plan in Q3 2023”

Posted on July 17, 2023July 18, 2023 by Sorn Chhorvyvatey

On 14 July 2023, CGCC organized the second Annual Town Hall meeting, a gathering of all CGCC staff to report on progress and milestones to the Executive Committee (Exco) of CGCC as well as sharing with the staff on the second quarter of 2023 progress, especially on the strategy and action plan of some respective departments of the third quarter in 2023.

CGCC 2nd Town Hall Meeting 2023 on “Milestones in Q2 2023 and Strategy Plan in Q3 2023”

The 2nd Town Hall Meeting was attended by all CGCC staff and a guest of honor and a presentation by Mr. Lon Sam Ol, Director of Banking & MFI Supervision of the National Bank of Cambodia. This 2nd town hall meeting is not only for sharing the progress report and plans from all departments, but also for a dialogue platform to openly discussion and obtain recommendations from management on the direction of CGCC’s operations and vision in improving financial inclusion and develop SMEs in Cambodia.

Maybank Cambodia, CGCC, BNI, CWEA ink MoU to Elevate SME Capacity and Capability Building

Posted on June 12, 2023October 20, 2023 by Sorn Chhorvyvatey

Maybank Cambodia, and Credit Guarantee Corporation of Cambodia (CGCC) have entered into a strategic partnership with Business Network International (BNI), and Cambodia Women Enterprise Association (CWEA) with an intent to support the local small and medium sized enterprises (SMEs) in the Kingdom through SME Building Capacity & Capability Programme (BCC).

Under the MOU, Maybank Cambodia, CGCC, BNI, and CWEA will collaborate to provide trainings and workshops to the members of BNI, and CWEA, and other participating SMEs to help them expand their businesses. The trainings will cover a range of topics relating to financial literacy and business operation.

The MOU will also pave the way for the participating SMEs’ long-term social and business growth through networking sessions, technical and knowledge sharing, and incentivised rates offered by Maybank Cambodia.

The MOU was inked at Maybank Tower and presided over by Rath Sophoan, Chief Executive Officer of Maybank Cambodia, Wong Keet Loong, Chief Executive Officer of CGCC, Kruy Rithy, President of BNI-Super, and Chea Ratha, Vice President of CWEA and witnessed by Dr Sok Siphana, Founding Partner of SokSiphana&associates and Chairman of Asian Vision Institute.

Sophoan, CEO of Maybank Cambodia said, “This MOU and BCC Programme signify Maybank’s continuous commitment to supporting the growth of SMEs in Cambodia. We believe that by providing training in capacity and capability building as part of the financial literacy programme, we are equipping SMEs with the right tools to sustain their business, thus contributing to the Kingdom’s overall economic development.”

Wong, Chief Executive Officer of CGCC said “We believe that the BCC Programme will be a valuable resource for SMEs in Cambodia and will help our entrepreneurs to grow and succeed with the broader opportunities to access to financing and improve financial literacy, which is aligned with our goals at CGCC”

Ratha, Vice President of CWEA endorsed “we are delighted to participate in this initiative, as it aligns with our mission of empowering women entrepreneurs through upskilling and networking.”

Rithy from BNI Super also expressed his optimism on the training. He said “We are confident that this partnership will be mutually beneficially, as it will allow our members to expand their networks, develop new skills, and grow their businesses.”

Credit to: Khmer Times, Published on 11 June 2023

CGCC, Maybank Cambodia, BNI-Super, and CWEA Sign MOU to Elevate SME Capacity and Capability Building

Posted on June 12, 2023February 7, 2024 by Sorn Chhorvyvatey

Phnom Penh, Cambodia – June 10, 2023 – Credit Guarantee Corporation of Cambodia (CGCC) and Maybank Cambodia have entered into a strategic partnership with Business Network International (BNI-Super) , and Cambodia Women Enterprise Association (CWEA) with an intent to support the local small and medium-sized enterprises (SMEs) in the Kingdom through SME Building Capacity & Capability Programme (BCC).

Under the MOU, CGCC, Maybank Cambodia, BNI-Super, and CWEA will collaborate to provide trainings and workshops to the members of BNI and CWEA, and other SME communities to help them expand their businesses. The trainings will cover a range of topics relating to financial literacy and business operation.

CGCC, Maybank Cambodia, BNI-Super, and CWEA Sign MOU to Elevate SME Capacity and Capability Building

The MOU will also pave the way for the participating SMEs’ long-term social and business growth through networking sessions, technical and knowledge sharing and incentivised rates offered by Maybank Cambodia.

The MOU was inked at Maybank Tower, highly witnessed by H.E. Dr. Sok Siphana, Founding Partner of SokSiphana & associates and Chairman of Asian Vision Institute, inked by Mr. Wong Keet Loong, Chief Executive Officer of CGCC, Mr. Rath Sophoan, Chief Executive Officer & Country Head of Maybank Cambodia, H.E. Chea Ratha, Vice President of CWEA, and Mr. Kruy Rithy, President of BNI-Super.

Mr. Rath Sophoan, CEO of Maybank Cambodia said, “This MOU and BCC Programme signify Maybank’s continuous commitment to supporting the growth of SMEs in Cambodia. We believe that by providing training in capacity and capability building as part of the financial literacy programme, we are equipping SMEs with the right tools to sustain their business, thus contributing to the Kingdom’s overall economic development.”

“Following the success of the BCC Programme in 2022 with CGCC, this year, we want to continuously fulfil our promise to humanise financial services by taking it to the next level through renewing and expanding our collaboration with two more partners namely CWEA, and BNI,” he added.

Mr. Wong Keet Loong, Chief Executive Officer of CGCC said “We are excited to partner with Maybank again this year for the BCC Programme, and the expanded outreach with BNI and CWEAto launch this important programme. We believe that the BCC Programme will be a valuable resource for SMEs in Cambodia and will help our entrepreneurs to grow and succeed with the broader opportunities to access to financing and improve financial literacy, which is aligned with our goals at CGCC”

H.E. Chea Ratha, Vice President of CWEA endorsed “we are delighted to participate in this initiative, as it aligns with our mission of empowering women entrepreneurs through upskilling and networking. We encourage all CWEA members and women entrepreneurs alike to take advantage of this opportunity to grow and learn.”

Mr. Kruy Rithy, President of BNI-Super also expressed his/her optimism on the training. He/she said “We are confident that this partnership will be mutually beneficially, as it will allow our members to expand their networks, develop new skills, and grow their businesses.”

In this signing ceremony, there was also a panel discussion on “Cambodia Economic Outlook, Challenges and Opportunities of SMEs”, participated by 4 panelists: H.E. Dr. Sok Siphana, H.E. Chea Ratha, Mr. Rath Sophoan, and Mr. No Lida, Deputy CEO of CGCC.

In 2022, the BCC Programme trained nearly 100 SMEs and financial advisors on various topics including business registration in Cambodia, importance of financial discipline, branding and digital marketing, as well as the aspects of managing human resources. The trainings were presented by subject-matter experts and professionals from locally renowned law firms, business consulting, advertising agencies and financial institutions.

CGCC provides $120M credit guarantees to biz

Posted on May 19, 2023June 2, 2023 by Sorn Chhorvyvatey

The Credit Guarantee Corporation of Cambodia (CGCC) provided credit guarantees of $120 million to businesses as of February 2023.

CGCC announced on Wednesday that it supported 1,367 businesses by providing credit guarantees for their loan applications as of the end of April 2023.

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

The total amount of outstanding guaranteed loans was $97.5 million, while the total amount of outstanding guaranteed obligations was $70.32 million.

It said that there are 1,249 small and medium-sized businesses (SMEs) and 118 large businesses in Cambodia.

About 550 were women-owned, 513 were secured loans, and 854 were unsecured loans.

CGCC said that various credit guarantee schemes played a vital role in strengthening entrepreneurship and improving financial inclusion in Cambodia, particularly during the Covid-19 pandemic, by facilitating the smooth distribution of loans.

It launched three guarantee schemes so far, including the Business Recovery Guarantee Scheme (BRGS) in March 2022; the Co-Financing Guarantee Scheme (CFGS) in September 2021; and the Women Entrepreneurs Guarantee Scheme in April 2022. The CGCC also extended the CFGS to the tourism sector.

The CGCC, which is under the Ministry of Economy and Finance, extended the BRGS from January 1, 2023, until the $200 million scheme is fully utilized.

These guarantee schemes are a way to help businesses get the money they need to grow and succeed. They are a valuable tool for supporting entrepreneurship and financial inclusion in the country.

The extension of BRGS will include updates to some of its features, such as the scheme period, the definition of MSMEs and large firms, and the maximum loan amount for each guarantee.

BRGS aims to help businesses, including MSMEs and large firms, obtain formal loans from participating financial institutions for working capital, investment, and business expansion.

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

The Cambodian Credit Guarantee Corporation has played an important role in serving the needs of small and medium enterprises in Cambodia, which are struggling during the epidemic of Covid-19 and the inflation crisis, and need credit from banks for their businesses.

It played a vital role in supporting SMEs who have been struggling during the Covid-19 pandemic and the inflation crisis, and they need credit from banks to keep their businesses afloat.

Credit to : Khmer Times Published on May 19, 2023

Courtesy visit by CGCC to NBC to discuss on the current situation of the credit market in Cambodia

Posted on May 15, 2023June 7, 2023 by Sorn Chhorvyvatey

On Friday, 12 May 2023, at the National Bank of Cambodia (NBC), Credit Guarantee Corporation of Cambodia (CGCC), led by Mr. Wong Keet Loong, CEO of CGCC, paid a courtesy visit to H.E. Rath Sovannorak, Assistant Governor and Director General of Banking Supervision of NBC.

CGCC’s CEO, Mr. KL Wong was very grateful for the warm welcome of H.E Sovannorak and his team and was very pleased to update on CGCC’s latest progress in providing credit guarantee and CGCC’s strategy that requires close cooperation and support from NBC.

In response, H.E. Sovannorak praised the progress made by CGCC and expressed his support for CGCC’s mission to provide guarantees on loans disbursed by banks and microfinance institutions (MFIs) to businesses that lack collaterals, especially SMEs, the backbone of the economy, and to raise SMEs awareness on financial literacy.

The meeting also discussed the latest development in the banking sector, new NBC regulations as well as ways to enhance cooperation to improve financial inclusion and access to finance.

Give a Day: Credit Guarantee Schemes & Its role in Enterprise Development

Posted on February 16, 2023June 7, 2023 by Sorn Chhorvyvatey

The 11th Give a Day has featured the Credit Guarantee Corporation of Cambodia as its keynote as well as enabled Cambodia’s entrepreneurial ecosystem to connect at the new Khmer Enterprise Headquarters for the first time in 2023.

Khmer Enterprise CEO Dr. Chhieng Vanmunin delivered the welcoming remarks highlighting the ongoing progression of the initiative which was first piloted in 2021 before receiving its full funding for monthly and quarterly meetings in 2022 and has now been renewed for 2023.

“The Give a Day monthly meetings and quarterly ecosystem builder events have been greatly welcomed by Cambodia’s entrepreneurial community – and have provided both learnings and networking opportunities between various sectors,” he told over 50 attendees from the ecosystem at KE headquarters.

Give a Day: Credit Guarantee Schemes & Its role in Enterprise Development

“We also wanted to welcome everyone to our new headquarters at the Business Development Center in Chroy Changvar, Phnom Penh, and advise that our open working space is available to everyone in the ecosystem as well as both our meetings’ rooms and event space,” he added.

Rajiv Pradhan Country Director at Swisscontact in Cambodia and Sabine Joukes Pact Cambodia Country Director and WE Act Chief of Party echoed this statement adding it was fantastic to reconnect the ecosystem for the first time in 2023.

Increase credit guarantee issuance by 50% in 2023

Delivering the keynote CGCC CEO, Wong Keet Loong commented the scheme was looking to increase the number of transactions it underwrites by 50% in 2023 as the organization looks to increase its outreach to the country’s micro and small and medium businesses, (MSMEs).

CGCC received its sub-decree on September 2020 and was fully incorporated in November 2020 its guarantees are intended to expand the availability of credit to smaller enterprises that may not have the collateral which banks typically require to advance working capital loans.

Initially launched as a tool to close the credit gap that emerged between small businesses during the pandemic, the CGCC issued its first guarantee in April 2021 and has since given a total of 985 Letters of Guarantee (LG) for loans worth $92.7. Mr Loong said that the CGCC had even more ambitious targets for 2023.

“My biggest goal for this year is to increase the outreach of our guarantees. The CGCC wants to provide guarantees to 1500 SMEs this year. We want to guarantee $100 million of loans in 2023. I know that is optimistic but I believe it can be done,” he said in response to a question from Cambodia Investment Review.

Rising interest rates may impact growth

Mr Loong said that the main barrier to reaching this target was the global macro picture, particularly the impact of rising US interest rates.

“The main issue right now is that external factors are affecting the cost of funding, which is going up as US interest rates rise and this is affecting a number of financial institutions (FIs). They see that fixed deposit rates are going crazy which is good for depositors, but not FIs and this impacts their lending,” he added.

Global factors may act as a drag on the CGCC’s work in the near term, but fellow speaker H.E. Dr. Chhieng Vanmunin, CEO of Khmer Enterprise, said that if credit guarantees become more widely used in Cambodia it would make it much easier for firms to do business internationally.

“In their current state, a lot of Cambodian companies are unable to demonstrate a track record of success, however, if they run through the credit guarantee program with CGCC it provides a history of how well they managed issues such as shipping and cash flow.

So this is one of the things that we support them to expand their market internationally,” he said.

40% of its guarantees go to female-owned businesses

The CGCC currently offers four different guarantee products and in April last year, it launched it’s third the Women Entrepreneurs Guarantee Scheme (WEGS), a $50m capped fund that is aimed at supporting women and female-owned businesses.

According to the CGCC’s data up to 40% of its guarantees go to female-owned businesses, whereas Mr Loong said that up to 65% of Cambodian MSMEs were run by women. An audience member, who didn’t identify herself, suggested that this gap was partly due to issues over lack of financial knowledge.

“One reason is that we know most women entrepreneur’s businesses are not registered and one way to improve that is via financial literacy, and this will have many benefits. If financial literacy is growing then entrepreneurs are more confident, more informed, and able to negotiate good loans,” she said.

Mr Loong responded that the CGCC did support unregistered businesses, for the first year at least and that expanding awareness of credit guarantees should in turn increase the number of registrations by female business owners.

“However, we tell customers that you need to be registered after a year, because when the anniversary comes, if you’re not registered, then we charge you an additional 0.5%. So, in a way, it incentivizes businesses to be registered. But when they come on board, they can be unregistered,” he said.

The Give a Day program returns in 2023

Give a Day is an initiative within the Entrepreneurship Ecosystem Building Project (EEB) which is jointly funded by Khmer Enterprise, USAID’s WE Act Project through Pact Cambodia and Swisscontact.

In addition, to monthly meetings, the initiative also included a quarterly Ecosystem Builders Network (EBN) event that focused on mapping the six pillars of Isenberg’s Model of the Entrepreneurial Ecosystem.

The quarterly meetings created a space through which ecosystem builders and government agencies can share information, foster best practices, identify market gaps and opportunities, and explore collaboration or complementarity to strengthen the ecosystem.

Cambodia’s ESO ecosystem, broadly defined as groups that support, train, and fund entrepreneurs is still in the nascent stage with many new organizations launched to help nature and develop the sector.

Credit to Cambodia Investment Review: Give a Day: Credit Guarantee Schemes & Its role in Enterprise Development

CGCC and Role of Credit Guarantee Schemes in Enterprise Development of “Give a Day” Event

Posted on February 13, 2023June 7, 2023 by Sorn Chhorvyvatey

On 10 February 2023, Mr. Wong Keet Loong, CEO of CGCC, provided a Keynote Presentation on “Credit Guarantee Schemes of CGCC and its Role in Enterprise Development” at “Give a Day” event, co-organized by Swisscontact, Khmer Enterprise, and Pact Cambodia, and presided over by H.E. Dr. Chhieng Vanmunin, Mr. Rajiv Pradhan, Country Director of Swisscontact, Ms. Sabine Joukes, Chief of Party, WE Act/Pact Cambodia, and participated by almost representatives from Entrepreneur Support Organizations (ESOs), investors and business associations.

CGCC and Role of Credit Guarantee Schemes in Enterprise Development of “Give a Day” Event

“Give a Day” is a forum gathering the entrepreneurial ecosystem community in Cambodia that are mutually supporting each other with the willingness to bring any open discussion related to entrepreneurship for effective solutions. Today’s “Give a Day” event theme is credit guarantee schemes that are a gateway for SMEs to access formal loans, therefore it is crucial that SMEs and ESOs understand the schemes.

Mr. KL Wong introduced credit guarantee schemes’ journey in Cambodian Financial Ecosystem and its role in supporting potential MSMEs to be able to obtain an easier and larger amount of loans under CGCC’s credit guarantee through CGCC’s participating financial institutions. Participants were pleased to learn about the benefits of credit guarantees and how this financial instrument could address the challenges in access to finance that their members and network are currently facing.

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