The Ministry of Economy and Finance yesterday launched the “$50 Million Credit Guarantee Project”, the second round of its kind, to support small and medium enterprises (SMEs) through the Cambodian Credit Guarantee Corporation (CGCC).
The Co-Financing Credit Scheme, abbreviated to CFGS, was developed specifically for co-financing loans provided under SME Co-Financing Scheme Phase 2 (SCFS II) of the Small and Medium Enterprise Bank of Cambodia.
CGCC’s CFGS project and SME Bank’s SCFS II project are a joint venture between the two public enterprises to improve access to finance for small and medium enterprises in Cambodia.
A banana retailer in Phnom Penh. The Ministry of Economy and Finance yesterday launched the ‘$50 Million Credit Guarantee Project’, the second round of its kind, to support small and medium enterprises through the Cambodian Credit Guarantee Corporation. KT/Mark Hughes
While SCFS II aims to reduce the cost (interest rate) of SME loans, CFGS is a credit guarantee scheme that acts as collateral from 70 percent to 80 percent of the loan size to reduce asset demand of collateral from banking and financial institutions to borrowers.
The project will enable the issuance of new loans in the banking sector from CGCC’s participating financial institutions to businesses.
Secretary of State of the Ministry of Economy and Finance and Chairman of the Board of the CGCC Ros Silva said, the launch of the CGCC CFGS is a timely response and an important additional support for the SME Bank’s SCFS II project.
“Cambodian SMEs are in risk-sharing with participating financial institutions. The two projects will complement each other in addressing two main challenges in accessing finance for small and medium enterprises, the first is the high cost of obtaining a loan and the second is the lack of collateral,” he said.
The CGCC launched a $200 million credit bailout plan in March 2021 to support economic recovery during the Covid-19 crisis.
As of Tuesday, CGCC has provided credit guarantees on 85 loans of approximately $12 million to businesses.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.
