Financial institutions in Cambodia have released $38.1 million as loans to 377 diverse businesses in the country without collateral requirement in the last one year, according to the Credit Guarantee Corporation of Cambodia (CGCC).
CGCC, operated under the technical and financial guidance of the Ministry of Economy and Finance (MEF), has guaranteed $33.55 million in US dollars and $4.54 million in Khmer riels with 377 letters of guarantee (LG) between April, 2021 and April, 2022.
Wong Keet Loong, CEO of CGCC, said in a report that the state-owned firm had partnered with 23 financial institutions in Cambodia as of March this year including Chip Mong Bank, Cambodia Asia Bank, Cambodian Public Bank, Acleda Bank, ABA Bank, Canadia Bank, May Bank, AMK MFI, LOLC MFI and Chamrouen MFI.
“With the reopening of the border, Cambodia is ready to welcome back more international tourists. This has spurred the revival of many businesses such as food & beverage, restaurants, retail trade, construction, manufacturing and agriculture. With such momentum, we are optimistic that the demand for guaranteed loans will grow,” said Wong.
Businesses – 364 small and medium enterprises and 13 large firms – have used the guaranteed loans they received between $6,000 and $1 million in US dollars and 40 million and 330 million Khmer riels for three main purposes that include working capital, investment or business expansion and capital expenditure.
Participating banks and microfinance institutions have provided 268 uncollateralised loans to businesses owned by women and the rest to non-women in agriculture, industry and services in Phnom Penh, and Battambang and Kampong Thom provinces.
Canadia Bank, Maybank and Sathapana Bank were the top performers in the disbursement of loans guaranteed by CGCC. Maybank announced that it can provide loans up to $400,000 with no collateral, while Sathapana Bank offers between $30,000 and $300,000 in US currency or Khmer riel. CGCC recently launched its Women Entrepreneur Guarantee Scheme, which will see up to $30,000,000 as collateral against loans for women entrepreneurs.
The initiative satisfies the Strategic Framework and Programmes for Economic Recovery in the Context of Living with the Covid-19 as a New Normal 2021-2023 of the government by encouraging commercial banks and microfinance institutions to increase additional lending by relaxing the credit guarantee requirements.
A study by IFC found that 90 percent of the SMEs managed by women were profitable, yet among these businesses, there was an unmet demand for credit to the tune of $4.2 billion. Wong cited this research as the rationale for targeting women under this scheme. “Cambodian women-owned businesses have difficulty providing collateral to secure loans. About 60 percent of the entrepreneurs are women. Based on similar research, women entrepreneurs have better repayment track records,” Wong told Khmer Times.
Source: Khmer Times