The Credit Guarantee Corporation of Cambodia (CGCC) announced on Wednesday that it has facilitated loan guarantees totaling $164 million for 1,928 micro, small, and medium enterprises (MSMEs) since its inception three years ago. Launched during the Covid pandemic to assist businesses in navigating economic challenges, the CGCC has made significant strides, currently boasting an active guaranteed loan portfolio of $116.13 million, supporting MSMEs that collectively employ over 52,000 individuals across Cambodia.
During its annual seminar, “Diversifying Credit Guarantee Mechanism for Sustainable Financing of MSMEs,” Heng Bombakara, First Deputy Director General of Banking Supervision at the National Bank of Cambodia (NBC), emphasized the critical role of SMEs in Cambodia’s economy. SMEs account for 70% of employment and contribute 58% to the national GDP, spanning sectors from agriculture and industry to services. However, access to banking loans remains a challenge for many due to factors like insufficient financial records, lack of financial literacy, and absence of effective corporate governance structures.
The CGCC was established as a direct response to these challenges, especially during the Covid crisis, when the need for timely financial access became paramount. Ros Seilava, Secretary of State of the Ministry of Economy and Finance, detailed the rapid development and implementation of CGCC’s policy framework and operational guidelines, which led to the launch of the first credit guarantee scheme within nine months of inception.
The CGCC’s efforts peaked in March 2022, with loan guarantees for 91 businesses amounting to $8.3 million. The momentum continued through 2022, with $71.4 million guaranteed for 791 businesses, and into 2023, with $72 million for 943 accounts. The portfolio distribution reveals that 50% of the guaranteed businesses were in services and trade, with 3% in agriculture, 7% in industry, and the remaining 40% comprising various other sectors.
This strategic support from CGCC underscores the Cambodian government’s commitment to bolstering the MSME sector, ensuring sustained economic growth and stability by facilitating access to crucial financial resources.
Source: Khmer Times
