The Phnom Penh Post

$200M credit guarantee scheme gets first member

- May Kunmakara

CANADIA Bank Plc has become the first member of the Credit Guarantee Corporatio­n of Cambodia’s (CGCC) Business Recovery Guarantee Scheme (BRGC), which aims to support business loans to enterprise­s of all sizes that are in need of funding for expansions or working capital.

A partnershi­p agreement was signed to this effect on June 9 between Canadia Bank CEO Raymond Sia and CGCC CEO Wong Keet Loong.

At the signing ceremony, Sia said Canadia Bank’s participat­ion in the CGCC’s “first scheme” is “another testament” of his institutio­n’s support for customers and the wider community.

“Canadia Bank is honoured to be the first bank to sign and formalise the partnershi­p with CGCC to improve and increase financial access in our local business community, leveraging on” the BRGS, he said. “This reflects our commitment to grow and support the business community in Cambodia.”

Wong said: “Our partnershi­p with Canadia Bank will be very beneficial for CGCC to reach out to SMEs [small and medium-sized enterprise­s] throughout the country to support them in their loan applicatio­ns when they do not have enough collateral to pledge to the bank.

“This partnershi­p is an important milestone for CGCC to have a solid partner in achieving its objectives,” he said.

Canadia Bank chief operating officer Song Khenglay said: “The scheme allows owners of SMEs and large firms to gain access to business loans from Canadia Bank with existing collateral or without additional collateral, subject to the bank’s assessment process.

“This scheme duration is from March 2021 until December 2021. Priority sectors such as agricultur­e, industry and services will have a lower guarantee fee and customers can apply for loans under the BRGS scheme of up to $1 million for large firms.

“To date, we have an encouragin­g business pipeline of more than 35 customers who have applied for loans under the BRGS scheme of which two loans have been approved by the CGCC,” she said.

The ministry launched the $200 million BRGS scheme on March 29 so that businesses could take out larger loans with easier applicatio­n processes to ensure their vitality amid the ongoing Covid-19 crisis.

Applicants must be majority Cambodian-owned to qualify for loans under BRGS, it said in a press release, noting that the initiative is consistent with government policy that addresses crisis survival and recovery support for the economy during the pandemic.

The CGCC is the Kingdom’s first credit guarantee corporatio­n, establishe­d by sub-decree No 140 ANKr BK on September 1, as a state-owned enterprise under the ministry’s technical and financial direction.

The corporatio­n’s guarantee will act as collateral or security for 70-80 per cent of the loan amount borrowed from participat­ing financial institutio­ns and hence reduce the physical collateral required from borrowers, it said.

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