Synopsis: The scheme is in line with the Royal Government’s Pentagonal Strategy – Phase 1, focusing on economic diversification, financial inclusivity, and private sector development.
In a major move to support Micro, Small and Medium Enterprises (MSMEs) and large firms in securing much-needed financing, the Credit Guarantee Corporation of Cambodia (CGCC) has launched a $200 million Economic Stimulus Guarantee Scheme (ESGS).
The scheme took effect on July 1, following the conclusion of the Business Recovery Guarantee Scheme (BRGS), which expired on June 30.
In a statement released on Monday, CGCC said that the ESGS was approved by Deputy Prime Minister and Minister of Economy and Finance and is designed to support MSMEs and large firms in securing much-needed financing.
Under the new scheme, CGCC has increased its guarantee coverage to as much as 90 percent of the total loan principal. The minimum guarantee fee has been lowered to just 0.75 percent of the outstanding guaranteed amount, alongside other favourable conditions to encourage greater loan disbursement from Participating Financial Institutions (PFIs).
The scheme is in line with the Royal Government’s Pentagonal Strategy – Phase 1, focusing on economic diversification, financial inclusivity, and private sector development.
“As a state-owned enterprise under the Ministry of Economy and Finance, CGCC is committed to promoting financial inclusion and supporting enterprise development,” the statement said.
CGCC currently provides a range of credit guarantee products, including loan guarantees in the banking sector, bond guarantees in the securities market, and the Entrepreneurship Program Initiative of CGCC (EPIC).
As of the end of May 2025, CGCC has issued guarantees for 4,877 business loan accounts, with a total guaranteed amount of around $294.32 million.
The Credit Guarantee Corporation of Cambodia (CGCC) has played an increasingly critical role in supporting small and medium-sized enterprises (SMEs) in the Kingdom, especially during times of economic uncertainty, according to a socio-economic researcher Chey Tech.
He told Khmer Times that CGCC’s credit guarantees have become a key financial tool for many SMEs that lack collateral to access loans from commercial banks or microfinance institutions.
“According to the Ministry of Planning, more than 90 percent of registered businesses in Cambodia are SMEs, and about 70 percent of the workforce is employed in this sector,” he said. “After the COVID-19 crisis, many of these businesses have struggled, and the government has taken several steps to support them. One of the most significant has been through the work of CGCC.”
He explained that CGCC’s guarantees allow financial institutions to lend to businesses that would otherwise be deemed too risky due to a lack of collateral. “This mechanism has enabled many SMEs to get the financing they need to maintain operations and expand production.”
Tech noted that while the government has introduced a range of support measures for SMEs—such as tax relief, capacity-building programmes, and social protection services—CGCC has played a distinct and crucial role by providing credit guarantees to businesses that lack collateral.
With ongoing disruptions at the Cambodia-Thailand border affecting the flow of goods, he said there is an even greater need to strengthen the domestic SME sector. “Some SMEs have already used CGCC-backed loans to expand successfully. We need to build on that momentum and make sure more businesses can access this support.”
However, he added that effective implementation requires close collaboration between CGCC and the SMEs. “It’s important for CGCC to work with businesses that are applying for guarantees to ensure they have clear and realistic business plans. This will help ensure the sustainability of the loans and reduce the risk of default.”
Tech also urged CGCC to consider ways to ease the financial pressure on SMEs by lowering interest rates. “Currently, the interest rates under the guarantee scheme are still similar to what banks charge. If CGCC can work with lending institutions to reduce these rates, it would make a big difference for small businesses trying to recover and grow.”
He concluded that CGCC’s role will remain vital in the years ahead as Cambodia looks to build a more resilient and self-sustaining economy led by a strong SME sector.
CGCC continues to strengthen its role in enhancing access to finance for micro, small, and medium enterprises (MSMEs), particularly those with limited collateral or facing credit constraints.
No Lida, CEO of CGCC, said recently that the credit guarantee scheme has become an effective mechanism to support high-potential enterprises in expanding their operations.
“Small and medium-sized enterprises with strong potential often face difficulties securing loans due to a lack of collateral or perceived risks. To address this, the government, through CGCC, provides credit guarantees to enable these businesses to access financing,” he said.
Through its guarantee schemes, CGCC covers up to 80 percent of the loan amount, giving banks and microfinance institutions the confidence to extend credit to SMEs in need of working capital or investment for business expansion.
The scheme is implemented in partnership with PFIs, including the state-run Agriculture and Rural Development Bank and SME Bank, to channel credit to viable enterprises across various sectors.
Established in November 2020, CGCC serves as Cambodia’s official credit guarantee institution. Its mission is to promote financial inclusion, support the development of the SME sector, and contribute to economic growth. The guarantee schemes have helped enterprises seize investment opportunities, create jobs, and improve incomes nationwide.
