Phnom Penh, Credit Bureau (Cambodia) Co., Ltd. (CBC) and Credit Guarantee Corporation of Cambodia Plc. (CGCC) signed a Memorandum of Understanding to strengthen financial inclusion for women and SMEs through the promotion of credit guarantee support scheme and adoption of data analytics in credit decision-making by financial institutions across Cambodia. The cooperation between CBC and CGCC will expand access to credit, by providing more transparent loan assessment to women and SMEs.
As the only credit reporting service provider in the country, CBC provides credit history information bridging the information asymmetry between borrower and lenders, thus, reducing transaction costs of lending and promoting access to finance. Over the years, CBC’s credit reporting services and a portfolio of data analytics solutions have eased barriers to credit for many Cambodians and reduced industry-wide credit risk. CBC’s role as a key financial infrastructure is significant to maintaining financial sector stability for the country.
CGCC provides credit guarantees on loans disbursed by participating financial institutions to support viable businesses and individuals that lack collateral when seeking access to finance. Especially, in the context of the economic slowdown from the pandemic, support from CGCC has been instrumental in driving economic growth, fuelling employment and stabilizing the economy.
Mr. Oeur Sothearoath, Chief Executive Officer of CBC said, “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.”
Mr. Wong Keet Loong, Chief Executive Officer of CGCC said “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. When PFIs report the conduct of guaranteed loans in their monthly reporting to CBC, this data would be useful to capture the profile of Cambodian SME borrowers with guaranteed loans. This would further facilitate access to financing for SMEs.”
While it is mandatory for every lender to check credit report of borrowers from CBC during loan assessment, CGCC and CBC will collaborate to enable financial institution to use digitalisation, advanced reporting and data analytics tools from CBC to conduct accurate risk assessment of borrowers and monitor their performance.
Through this collaboration, the two institutions also commit to cooperate in financial education and awareness activities to promote financial inclusion in the country.
Since 2012, CBC is the leading provider of financial information, analytical solutions, and credit reporting services to financial institutions and consumers in the Kingdom of Cambodia. CBC assists customers in managing the risks and rewards of commercial and financial decisions through a range of solutions, including Consumer Credit Report, Commercial Credit Report, K-Score, Data Analytical Report, Portfolio Monitoring Service, Portfolio Review Service, and Customized Solutions. CBC serves a member base of 180 financial institutions with credit histories of more than 7 million borrowers.
CGCC is a state-owned enterprise operated under the technical and financial guidance 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 made to businesses based on international standards to share the risk with lenders and to improve financial inclusion. As of the end of July, CGCC has supported 591 businesses by providing credit guarantees for their loan applications, amounting to USD 57.4 million equivalent. CGCC has provided the most guarantee to SMEs, which is accounted for 96% of the total businesses receiving the credit guarantee from CGCC.