Credit Guarantee Scheme - BFS/S

The purpose of the scheme is to issue a range of credit guarantee products to lenders (commercial banks and other financial institutions) for SMME borrowers whose access to finance is impeded by the fact that they do not have collateral required by the lenders. SMMEs would normally require finance in order to establish, expand or purchase existing businesses. The three broad categories of indemnities are available are individual, portfolio and institutional indemnities.

The financial institution will assess the business plan and loan application in terms of its lending criteria. sefa will set certain guidelines for the assessing and monitoring of the loan process on which the indemnity will be enforced. Once the application has been approved, the financial institution will approach sefa for indemnity cover and a mentor may be appointed to help with the implementation of the business plan, setting up of operational systems and general business management. The financial institution manages the loan and collects payments for the duration of the loan. The full repayment of the loan remains the responsibility of the applicant.

Eligibility criteria for the Banks and Financial Sector “BFS”
Eligibility criteria for non-bank financial intermediaries: