Bank Guarantee Line
Introduction
- Aims to strengthen trust between counterparties and facilitate commercial transactions
- Enhances confidence, facilitates access to financing, promotes investments, and supports economic development
- Provides bank guarantees to secure transactions and loans granted by local commercial banks in favor of eligible public and private sector companies
- Maximum tenor of 36 months, with commission payable upfront or quarterly
Credit Type
Bank Guarantee
Target Clients
This product aims to provide a bank guarantee to secure transactions and loans obtained from local commercial banks in favour of eligible public and private sector companies
Context
The Bank offers bank guarantee lines to support companies and financial institutions in the Arab Maghreb Union States by providing credit guarantees.
The Bank Guarantee Line is designed to build trust among stakeholders and facilitate commercial transactions. It includes the following types of guarantees:
- Concentration Limit Breach Guarantee:
This product serves as a financial tool to help banks comply with regulatory standards set by central banks regarding credit exposure limits across their client base. Under this guarantee, the Bank provides local commercial banks with a credit guarantee that allows them to exceed the regulatory credit concentration thresholds established by supervisory authorities. - Financial Commitment Guarantee:
A guarantee provided to support companies in raising funds from financial institutions. This product is a vital instrument aimed at facilitating access to financing from entities such as banks and other lending institutions.
By offering this guarantee, the Bank enhances the creditworthiness of eligible companies, thereby helping them secure loans or credit facilities needed to support their projects or expansion plans.
Product Features
Objective :
- Building Trust: Providing guarantees that help establish trust among stakeholders, facilitating the conclusion of contracts and the execution of projects.
- Facilitating Access to Financing: Enabling large companies and financial institutions to obtain the necessary funding by securing their commitments, thus improving access to financial resources.
- Promoting Investment: Supporting investment projects by offering guarantees that encourage investors to make bold investment decisions.
- Supporting Economic Development: Contributing to economic growth in the Arab Maghreb Union States by facilitating investment flows and ensuring project continuity.
Financing Ratio:
- Accounts Receivable Financing: Up to 80% of submitted invoices (subject to financing) that are accepted by the bank will be financed.
- Production Cycle and Inventory Financing: The financing amount is determined following a file review and assessment of the company’s specific needs.
Loan Term:
Duration: Up to 36 months.
Commission Payment Schedule:
The commission is payable in advance or on a quarterly basis.
Collateral Release Timeline:
According to the agreed-upon period.
Financial Terms:
Financial conditions are determined based on the bank’s pricing policy:
- Guarantee Fee: A percentage of the total guaranteed amount.
- Applicable Fees and Reference Charges:
- Commitment Fee: A percentage of the total loan amount.
- Non-Utilization Fee: A percentage of the unused portion of the loan.
- Application Review Fee: A fixed lump sum.
Guarantees:
The bank reserves the right to request any guarantees it deems necessary as part of the credit risk assessment. The following list of potential guarantees is provided for illustrative purposes and is not exhaustive:
- Mortgage
- Pledge of business assets
- Equipment pledge
- Risk insurance
- Promissory notes
- Personal guarantees from partners or shareholders…
Marketing Approach
- Direct marketing.
- Digital marketing.
- Marketing through international and local financial institutions.