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Guarantees

 

What is a guarantee?

A guarantee is an instrument by which the guarantor (Development Bank of North Macedonia) commits to the creditor that they will fulfill the valid and due obligation of the debtor (the client of the Development Bank of North Macedonia), if the debtor fails to do that.

 

Guarantees offered by the Bank

The Bank offers two types of guarantees directly to end users:

  • Individual guarantee from the Guarantee Fund, intended for large exporting companies; and
  • Customs guarantee, intended for domestic companies which import goods in order to undergo processing operations and re-export the exported goods.

The Bank also offers portfolio guarantees for banks and savings houses, which guarantee up to 80% of the amount of newly approved loans for current assets, i.e. up to 50% of the amount of newly approved loans for fixed assets for micro, small and medium traders.

 

Guarantee Fund (Credit-guarantee scheme)

In accordance with the amendments to the Law on Development Bank of North Macedonia ("Official Gazette of RNM" No. 77/21), the Bank established a separate organizational unit - Guarantee Fund, within the Credit and Guarantees Division. The Guarantee Fund is the pillar of the credit-guarantee scheme through which the private sector is supported, by securing the part of the collateral for loans approved by banks and savings houses.

The Guarantee Fund was established with funds from the Budget of the Republic of North Macedonia, in the amount of EUR 10 million.

The frameworks of the credit-guarantee scheme, the restrictions of the Guarantee Fund, the method of financing, the acceptable loans for guarantee, as well as the notification, are all regulated by the law itself.

There are two guarantee products realized from the Guarantee Fund:

  • Portfolio guarantees to a bank or savings house, for newly approved loans to micro, small and medium traders; and
    The maximum guarantee amount is up to 80% for working capital loans and up to 50% for fixed assets loans.
  • Individual guarantees for large exporting companies (provided that at least 30% of the income in the last fiscal year come from exports), which are guaranteed on behalf of the company to a bank or savings house.
    The maximum amount of the guarantee is up to 50% of the loan amount.