The finance ministry has authorised the extension of the Credit Guarantee Corporation of Cambodia Plc’s (CGCC) $200 million Business Recovery Guarantee Scheme (BRGS) beyond December 31, 2022, until all funds have been utilised, according to the CGCC.
The scheme aims to widen access to formal loans from participating financial institutions (PFI) for working capital, investment and business expansions.
The terms of the BRGS have also been updated, including the maximum guarantee amounts for differing categories of businesses, CGCC noted in a statement.
“CGCC looks forward to working closely with all stakeholders to support the growth of businesses with the BRGS,” it added. “CGCC’s credit guarantee under BRGS will continue to act as collateral for 70-80 per cent of the loan amount borrowed from the PFIs, thus, reducing the physical collateral required from the borrowers.”
The statement disclosed that loans, mostly unsecured, totalling about $89 million were guaranteed by the state-owned enterprise as of December 31 under the BRGS, which was launched on March 29, 2021.
Cambodia Post Bank Plc, one of the PFIs, accounted for roughly $1 million of that, all of which went to small- and medium-sized enterprises (SME), confirmed its CEO Toch Chaochek, who welcomed the extension of the BRGS, hailing the scheme as a lifeline for SMEs who may have struggled to procure formal loans.
“The scheme has been a big help for SMEs who’ve been facing funding shortages and don’t have the collateral to obtain loans for business expansions or just to keep from going under,” he said.
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Author: May Kunmakara
Source: The Phnom Penh Post
Publication Date: 04 January 2023