The Credit Guarantee Corporation of Cambodia (CGCC) has launched Co-Financing Guarantee Scheme for Tourism (CFGS-T) to support the Government’s policy on recovery and growth of the tourism sector.
CFGS-T is especially designed to provide credit guarantees on co-financing loans disbursed by CGCC’s Participating Financing Institutions under the Tourism Recovery Co-Financing Scheme (TRCS) of the SME Bank of Cambodia, read a press release issued on July 12.
CFGS-T of CGCC and TRCS of SME Bank are the joint efforts of the two state-owned enterprises to improve access to finance for SMEs in the tourism sector, said the statement.
“While TRCS aims to lower SMEs’ cost of borrowing, CFGS-T is a guarantee scheme that will act as collateral/security for 80 percent of the loan amount; thus, reducing the physical collateral required from the borrowers,” it stated.
CFGS-T will support new loan disbursements in the banking sector to SMEs.
Under the scheme, the Participating Financing Institutions will be able to offer loan amounts, and the risk exposure will be shared by CGCC up to 80 percent.
The tourism recovery co-financing scheme is aimed at financing businesses in the sector, helping businesses to resume operations, renovate and modernise services, particularly to expand and diversify tourism services.
In May, the Royal Government of Cambodia released a financial intervention package of US$150 million to revive the tourism sector by financing businesses affected by the COVID-19 pandemic in the last two years.
The package comprises US$75 million from the government through SME Bank and the rest from other financial institutions.
In the first six months of 2022, more than 500,000 international tourists visited Cambodia, a sharp increase by 394 percent compared to the same period in 2021.
The government targets at least two million of foreign tourists by next year, as it has eased stringent COVID-19 testing and quarantine requirement.
Tourism is one of the four pillars supporting Cambodia's economy. The country attracted up to 6.61 million international tourists in 2019, generating a gross revenue of US$4.92 billion, according to the Ministry of Tourism.
Source: Agency Kampuchea Press