CBC-CGCC Memorandum of Understanding offers transparent loan assessment for women and SMEs
Cambodian women and SMEs can expect more transparent loan assessment following a recent agreement between the Credit Bureau (Cambodia) Co., Ltd. (CBC) and the Credit Guarantee Corporation of Cambodia Plc. (CGCC).
They signed a memorandum of understanding to strengthen the financial inclusion of women and SMEs through the promotion of a credit guarantee support program and the adoption of data analyzes in decision-making in credit by financial institutions across Cambodia.
The cooperation between CBC and CGCC will expand access to credit, providing more transparent assessment of loans to women and SMEs, according to a statement.
He pointed out that as the only credit reporting service provider in the country, CBC provides credit history information to bridge the information asymmetry between borrowers and lenders. Thus, it reduces loan transaction costs and promotes access to finance.
“Over the years, CBC’s credit reporting services and a portfolio of data analytics solutions have eased credit barriers for many Cambodians and reduced credit risk industry-wide. CBC’s role as a key financial infrastructure is important in maintaining the stability of the country’s financial sector,” the statement said.
CGCC provides credit guarantees on loans made by participating financial institutions to support viable businesses and individuals who lack collateral when seeking access to financing. In particular, in the context of the economic downturn due to the pandemic, CGCC’s support has been instrumental in stimulating economic growth, boosting employment and stabilizing the economy.
Oeur Sothearoath, CEO of CBC, said: “This partnership marks an important step in improving financial inclusion for women and SME owners, as well as ensuring a fair, reliable and people-based approach. data to enable access to finance in the country. This collaboration between CBC and CGCC will strengthen our financial infrastructure and streamline much-needed support for SMEs.
Wong Keet Loong, President and CEO of CGCC, said, “Through this MOU, CGCC will be able to establish the credit profile of secured loans using CBC’s K-score as a benchmark for credit rating. credit from our secured borrowers. When PFIs report on the conduct of guaranteed loans in their monthly reports to CBC, this data would be useful in capturing the profile of Cambodian SME borrowers with guaranteed loans. This would further facilitate access to finance for SMEs.
While it is mandatory for every lender to check CBC’s borrower credit report when assessing loans, CGCC and CBC will work together to enable financial institutions to use digitization, advanced reporting tools and CBC data analytics to perform accurate risk assessment of borrowers and monitor their performance.
Through this collaboration, the two institutions are also committed to cooperating in financial education and awareness activities to promote financial inclusion in the country.
Since 2012, CBC has been the leading provider of financial information, analytical solutions and credit reporting services to financial institutions and consumers in the Kingdom of Cambodia. CBC helps clients manage the risks and rewards of business and financial decisions through a range of solutions, including Consumer Credit Report, Commercial Credit Report, K-Score, Data Analytics Report, portfolio monitoring service, portfolio review service and custom solutions. CBC serves a membership base of 180 financial institutions with credit histories of over 7 million borrowers.
CGCC is a public company operated under the technical and financial direction of the Ministry of Economy and Finance (MEF) and officially incorporated in November 2020. CGCC’s mission is to provide credit guarantees to lenders on loans granted to companies based on international standards to share risk with lenders and improve financial inclusion. By the end of July, CGCC had supported 591 businesses by providing credit guarantees for their loan applications, for an amount equivalent to $57.4 million. CGCC provided the most guarantees to SMEs, which account for 96% of the total enterprises receiving CGCC’s credit guarantee.