| Company | Credit Guarantee Corporation of Cambodia (CGCC) |
| Sector | Multi-sector |
| Country | Cambodia |
| PIDG Commitment |
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| Dates of PIDG involvement |
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Small and medium-sized enterprises (SMEs) are critical to Cambodia’s economy, accounting for 70 per cent of employment, 99.8 per cent of businesses, and contributing 58 per cent of the GDP.
Most of these SMEs have limited collaterals and no proper financial recordings, which means that financial institutions require high interest rates (ranging from 12 to 18 per cent) to provide financial support to them. Formal credit is a significant challenge with only 21 per cent of Cambodian SMEs having access to formal banking services. As a result, the financing market available to SMEs in Cambodia can be viewed as highly underdeveloped.
PIDG provided a 10-year, USD 7 million portfolio guarantee to Credit Guarantee Corporation of Cambodia (CGCC) as part of a wider capacity enhancement framework under the PIDG Credit Enhancement Facility initiative. The portfolio guarantee will allow CGCC to mobilise further bank lending towards SMEs in Cambodia, with a focus on businesses supporting the green transition.
The wider capacity enhancement framework will increase CGCC’s technical and financial capacity to issue larger infrastructure and corporate focused credit guarantees, helping to mobilise more long-term institutional and bank financing.
This transaction is expected to increase the number and volume of loans to SMEs in Cambodia linked to green facilities, whether it is through CGCC attracting additional funding for such facilities or more broadly from the private finance sector thanks to the demonstration effects.
This facility is unique in enabling green loans under the eligibility criteria and is anticipated to have demonstration and replication effects in increasing the comfort of private financiers to provide loans to SMEs, thereby enabling them to grow. Additionally, it will promote the adoption of green technology and climate mitigation practices within the SME sector.
The Credit Enhancement Facility initiative that this transaction is linked to seeks to accelerate the development of domestic capital markets and enhance financial inclusion through developing onshore guarantee capability. This facility is expected to mobilise USD 10 million from partner financial institutions.
More than 40 per cent of the workforce are women and more than 30 per cent are in senior leadership positions.
