Guarantee Approval Process

RFIs will conduct their normal due diligence on the loan applications of prospective borrowers. KCGF will not perform credit analyses and will not have any direct contact with Kosovo MSMEs. The following is a description of the guarantee approval and review process.

The financial institution will submit loans to the KCGF to be included in the guarantee with all the required information documenting the eligibility of the loans.

Relevant information will include (actual data collected will be more extensive):

  • Borrowers’ names and complete addresses;
  • Registration and fiscal numbers;
  • Sectors in which the borrowers are operating;
  • Demographic information on the business and on the MSME borrowers’ owners (gender, age, ethnicity);
  • Number of staff;
  • Purpose, type and maturity of the loans;
  • Age of the business (start-up vs. number of years in operation);
  • Any other information KCGF’s Board of Directors may require;
  • Verification from the Registered Financial Institution (RFI) that the guaranteed loans are new loans and not pre-existing loans, restructured loans or rescheduled loans.

The parameters for eligibility are spelled out in the Guarantee Agreement between KCGF and the lending institution and will be clear for loans to be covered by the guarantee. The loans will be covered when submitted by the RFI. KCGF will do periodic ex-post reviews to verify that loans under the guarantee meet the criteria.

The Managing Director and the Senior Risk Manager together will be authorized to approve KCGF guarantees up to the maximum guarantee amount allowed under KCGF policy.

Only the Board of Directors will be authorized to approve exceptions to KCGF policy, such as guarantees for loans exceeding the maximum maturity or amount specified in the Guarantee Agreement.