Bank Guarantees

Bank guarantees are written irrevocable undertakings issued by the Bank to pay the ben- eficiary a specific sum of money on demand in the event that its customer/applicant has not fulfilled his/her contractual obligation within the validity of the guarantee. The Bank guarantees Bid security/Bid bonds, performance guarantees, advance payment guarantee, retention guarantees, shipping guarantees and customs bonds

Product Features

  • Denominated in both local and foreign currency
  • Non fund based facility
  • For Bid Bonds/Securities Maximum unsecured limit of UShs 250 million
  • 50% Security cover for bid bonds/securities amounts above UShs 250 million
  • Attracts fees and commission as per tariff

Benefits

  • Fast and easy processing
  • Opportunity to access an unsecured limit for amounts below UShs. 250 million for bid guarantees/bonds only
  • Client obtains credit hence easing increase in liquidity
  • Opportunity to secure business contracts
  • Accessed alongside other credit facilities
  • Immediate compensation to beneficiary in case of default.

Requirements

  • Completed Bank Guarantee application form
  • Financial card
  • Possession of relevant business experience
  • For Bid guarantees above the unsecured limit of UShs 250 million, Security cover of up to 50% in the form of cash or mortgage on property.
  • For other types of guarantees, requirements similar to commercial loans
  • Depending on the customer, any combination of the following will also be require:
    a. Identification documents of the Directors
    b. Memorandum and articles of association
    c. Certificate of registration
    d. Company profile
    e. Borrowing resolution for the unsecured limit or secured limit
    f. Statement of bank accounts – 12 months

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