Bank, CGCC partner for quick loan turnaround
Bank, CGCC partner for quick loan turnaround
Canadia Bank Plc has joined the state-owned Credit Guarantee Corporation of Cambodia Plc’s (CGCC) Portfolio Guarantee Scheme (PGS) to offer guaranteed loans to local micro-, small- and medium-sized enterprises (MSME).
An agreement was signed to this effect on July 17 by Canadia Bank CEO and executive director Raymond Sia Say Guan and CGCC CEO Wong Keet Loong, to make it easier for MSMEs with little or no collateral to obtain credit from the lender for working or investment capital, allowing them to expand and make a greater contribution to Cambodia’s economic growth.
CGCC noted in a recent statement that it introduced the PGS on January 1, describing it as “a scheme under which guaranteed loan criteria are pre-agreed by CGCC and PFI [participating financial institutions] to enable the PFI to enrol multiple loans in PGS without having to get CGCC’s guarantee approval on each loan prior to loan disbursement”.
Thus, it explained, the PGS “enables quicker outreach and turnaround time than the previous Individual Guarantee Schemes (IGS)”.
At the signing ceremony, Canadia Bank’s Sia expressed optimism that the collaboration would “further our commitment to supporting the growth of [MSMEs] in Cambodia”.
CGCC’s Wong commented that the PGS “is targeted specifically for businesses under the retail and wholesale trade sector” and stressed that MSMEs “are vital contributors to Cambodia’s economy and employment opportunities”.
“Canadia Bank has been the top provider of guaranteed loans, and this partnership … will further cement our commitment to improve financial inclusion and sustainable growth of MSMEs,” he added.
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. The state-owned enterprise affirms that Canadia Bank was one of that scheme’s first bank PFIs.
CGCC announced that it had issued a total of 1,566 Letters of Guarantee (LG) for loans worth $132.74 million equivalent as of June 30, up from 1,275 LGs and $113.6 million at end-March. MSMEs accounted for 1,432 – or 91 per cent – of the LGs.
As of June 30, the outstanding guaranteed amount was $75.77 million out of the $105.07 million worth of loans covered by the LGs, as noted by the CGCC, remaining in the 70-80 per cent target range at 72.1 per cent.
