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Institutional Guarantee, Credit Guarantee Scheme
The Institutional Guarantee Scheme caters for institutions that on lend to the SMME and are able to source such capital from the commercial banks. Agreements are signed between Khula and the commercial banks to enable utilisation of the Scheme.
Finance has to be approved by the financial institution and in the case of a lack of collateral by the borrower; the bank would then apply to Khula for a guarantee.
The qualifying criteria is as follows:
Retail Financial Institution on lending to SMME's
Business to be conducted within the RSA, to South African citizens
Guarantees limited to 70% of the financing provided by the bank, such limit not to exceed 10% of Khula capital.
