CCC director-general Nguon Meng Tech (left) and CGCC CEO Wong Keet Loong sign the MoU on April 26. PHOTO SUPPLIED
State-owned Credit Guarantee Corporation of Cambodia Plc (CGCC) and Cambodia Chamber of Commerce (CCC) are joining forces to foster better access to guaranteed loans for the development of the Kingdom’s micro-, small- and medium-sized enterprises (MSME), and to provide support to these smaller businesses, “mainly CCC members”, according to a statement.
A memorandum of understanding (MoU) was signed to this effect between CGCC CEO Wong Keet Loong and Nguon Meng Tech, director-general of the CCC – the Kingdom’s apex trade body, at a ceremony last week, the statement noted.
“This cooperation will provide support to MSMEs – mainly CCC members – for greater access to finance despite collateral challenges, and to promote financial literacy, including credit guarantees to CCC members across the country,” it said.
Meng Tech underlined the damage wrought by the Covid-19 crisis on regional and global economies, especially how MSMEs have struggled to procure sufficient funds to keep their doors open.
“The MSMEs play significant roles in economic development. However, they face a lot of challenges, particularly financial constraints. In this regard, the MoU signing [by] CCC and CGCC today aimed specifically to promote access to guaranteed loans for the development of MSMEs.
“The MoU signing is also a positive sign that will help strengthen and deepen the cooperation between the two institutions,” he said in the statement.
The CGCC’s Wong added in the statement: “This MoU signing with the [CCC] is an important milestone for CGCC, as it enables CGCC to reach out to the members of CCC across the country.
“CCC, being an established business chamber with many SME [small- and medium-sized enterprises] members, will be a key partner to CGCC in promoting the understanding of the benefits of the credit guarantee,” the Malaysian said.
“Together with CCC, we can support the development of SMEs in Cambodia by improving financial inclusion and financial literacy,” he added.
The statement lauded the CGCC-CCC partnership as a demonstration of “a shared commitment to promoting economic growth and development” in the Kingdom. “By working together, the two organisations will help SMEs overcome financing challenges and unlock their potential to drive economic growth in the country,” it said.
Cambodia Post Bank Plc (CPBank) CEO Toch Chaochek commented to The Post on April 30 that the CGCC’s credit guarantees have played an “important role”, as collateral for loans, in ensuring access to formal finance among MSMEs.
“With the CGCC’s support, our MSMEs have been able to access more funds to support their businesses after being hit so hard by the Covid-19 pandemic over the past two years,” he said.
Incorporated in November 2020, the CGCC is run under the Ministry of Economy and Finance’s technical and financial assistance. The state-owned enterprise’s (SOE) central mission is “to provide credit guarantees to lenders on loans made to businesses based on international standards to share the risk with lenders and to improve financial inclusion”, its website says.
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 in a bid to widen access to formal loans from participating financial institutions (PFI) for working capital, investment and business expansions.
The enterprise announced that it had issued a total of 1,275 Letters of Guarantee (LG) for loans worth $113.6 million equivalent as of March 31 – up eight per cent from end-February and up 258 per cent year-on-year, in terms of value. MSMEs accounted for 1,173 – or 92 per cent – of the LGs.
As of March 31, the outstanding guaranteed amount was $65.4 million out of the $90.7 million worth of loans covered by the LGs, as noted by the CGCC, remaining in the 70-80 per cent target range at just over 72 per cent.
May Kunmakara
