Guarantees for Loans to Small and Medium Enterprises

How much of the loan does Kafalat Basic guarantee?

Fri, 04/12/2013 - 12:13 -- admin

How much of the loan does Kafalat Basic guarantee?

Kafalat Basic currently guarantees 75% of the value of the loan granted by the bank and 75% of the accrued interest during the grace period + 3 months. (Examples). The value of the guarantee diminishes proportionally to the value of the outstanding loan as calculated in the repayment schedule.

Thus, the Kafalat Basic guarantees the repayment of 75% of the outstanding amount to the bank if the borrower fails to repay. However, the borrower is liable for the whole outstanding amount and not only the 25% not guaranteed by Kafalat.

In the case the borrower fails to repay, the file is transferred to Kafalat that proceeds with the follow up of the outstanding amount. In any case, the borrower remains liable for the entire outstanding amount.