State-owned enterprise Credit Guarantee Corporation of Cambodia (CGCC) on August 11 announced that it had entered into a partnership with independent financial information provider Credit Bureau (Cambodia) Co Ltd (CBC) to improve access to financing for women and smaller businesses.

The two institutions signed a memorandum of understanding (MoU) to that effect on the same day, to enhance financial inclusion for women and small- and medium-sized enterprises (SME), promote the CGCC’s credit guarantee support schemes, and develop data analytics capabilities among formal lenders to improve the decision-making process in credit granting, the state-owned firm noted in a statement.

“The cooperation between CBC and CGCC will expand access to credit, by providing more transparent loan assessment to women and SMEs,” it said.

Under the MoU, CBC will provide credit history information “bridging the information asymmetry between borrower and lenders, thus, reducing transaction costs of lending and promoting access to finance.

“CGCC [will provide] credit guarantees on loans disbursed by participating financial institutions [PFI] to support viable businesses and individuals that lack collateral when seeking access to finance. Especially, in the context of the economic slowdown from the [Covid-19] pandemic, support from CGCC has been instrumental in driving economic growth, fuelling employment and stabilising the economy,” it added.

CBC CEO Oeur Sothearoath said in the statement: “This partnership marks a milestone in enhancing financial inclusion to women and SMEs owners as well as assuring a fair, reliable and data-driven approach in enabling access to finance for in the country.

“This collaboration between CBC and CGCC shall strengthen our financial infrastructure and streamline the much needed support for SMEs,” he said.

Speaking in the statement, CGCC CEO Wong Keet Loong pointed out that “with this MOU, CGCC will be able to build the credit profile of guaranteed loans by using CBC’s K-score as a reference for credit rating of our guaranteed borrowers”.

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Author: May Kunmakara

Source: The Phnom Penh Post

Publication date: 14 August 2022