The Credit Guarantee Corporation of Cambodia Plc (CGCC) has extended vital support to the business community, offering credit guarantees to 1,977 enterprises, amounting to $170.15 million by the end of January, in an effort to bolster micro, small, and medium-sized enterprises (MSMEs) affected by the Covid-19 pandemic.
As detailed in a recent update, the total of outstanding guaranteed loans stood at $119.21 million, with the guaranteed amount reaching $85.88 million. The Non-Performing Loan (NPL) ratio of these guaranteed amounts was recorded at 7.37%, with a claim payout of $289,987.
The majority of the beneficiaries of this initiative were MSMEs, with 1,825 supported, alongside 152 larger companies.
Ros Seilava, a Secretary of State at the Ministry of Economy and Finance, emphasized the significant role of the CGCC in the current global economic scenario. He pointed out that the CGCC’s efforts in providing adequate financing to MSMEs are crucial for tapping into new investment opportunities, creating jobs, and enhancing incomes, all of which are pivotal for economic advancement and are in line with the nation’s long-term vision for 2023/2050.
Seilava also stressed the importance of the CGCC in contributing to the development of Cambodia’s securities market by expanding its services to include bond guarantees. This expansion is expected to facilitate local bond issuers in raising funds through the securities market, thereby promoting economic diversification and enhancing Cambodia’s competitive edge in line with the government’s strategic goals.
Toch Chaochek, the CEO of Cambodia Post Bank Plc (CPBank) and a CGCC partner, shared insights into the benefits of CGCC’s backing. He noted that MSMEs that are formally registered and seek loans with CGCC’s support present a lower risk profile, which in turn boosts the confidence of financial institutions to extend more loans to this sector. This enhanced financial access is instrumental in aiding MSMEs to either expand or sustain their operations, thereby contributing to the stability of macroeconomic activities during economic downturns.
The establishment of CGCC, as per sub-decree No 140/ANKR/BK on September 1, 2020, and the initiation of its $200 million Business Recovery Guarantee Scheme (BRGS) on March 29, 2021, have been pivotal steps towards improving access to formal loans for business continuity and growth. The Ministry announced the ongoing implementation of this program until the allocated funds are fully utilized, underscoring the government’s commitment to supporting the business sector through challenging times.
