CGCC assist SMEs with guarantees
CGCC assist SMEs with guarantees
The Credit Guarantee Corporation of Cambodia Plc (CGCC) has provided credit assurances to 1,977 businesses, totalling $170.15 million as of the end of January, to support micro, small and medium-sized enterprises (MSMEs) impacted by the Covid-19 pandemic.
As of February 20, outstanding guaranteed loans totalled $119.21 million and the outstanding guaranteed amount was $85.88 million. The Non-Performing Loan (NPL) ratio of the outstanding guaranteed amount was 7.37% and the claim payout was $289,987.
Of the total businesses supported, 1,825 were MSMEs and 152 were large firms.
Ministry of Economy and Finance secretary of state Ros Seilava stated at a recent event that amidst the rapidly changing global economic landscape, the corporation is playing a crucial role.
He highlighted that it is instrumental in aiding MSMEs to obtain sufficient financing, enabling the enterprises to capitalise on investment opportunities, boost employment and increase income.
Seilava noted that the efforts are vital for fostering economic growth and align with the country’s 2023/2050 vision.
“CGCC must be ready to support Cambodia’s securities market by diversifying its credit guarantee services to include bond guarantees, thus providing credit enhancements to local bond issuers. This will enable them to mobilise funds through bond issuance on Cambodia’s securities market,” he stated.
“The credit guarantee mechanism will encourage innovative financing and financial products that support economic diversification and enhance Cambodia’s competitiveness. This aligns with the government’s Pentagonal Strategy-Phase I for growth, employment, equity, efficiency and sustainability,” Seilava added.
Toch Chaochek, CEO of Cambodia Post Bank Plc (CPBank) and a partner of CGCC, highlighted that MSMEs that are properly registered and seek loans with the assistance of the state-owned enterprise pose less risk compared to those that do not.
“With the presence of CGCC, it has helped us, the participating financial institutions, to feel more confident in disbursing more loans to MSMEs. This aids in providing them greater financial access to expand or support their business growth, thereby contributing to maintaining sound macroeconomic activities during tough times of economic stress,” he said.
According to the ministry, the CGCC was established by sub-decree No 140/ANKR/BK on September 1, 2020. Its $200 million Business Recovery Guarantee Scheme (BRGS) was launched on March 29, 2021, to widen access to formal loans from participating financial institutions for working capital, investment and business expansions, as per the ministry.
In early January, the ministry announced the continued execution of the programme until funds have been exhausted.
