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Letter of Intent


Eximguaranty Company Ghana Ltd has introduced a new product called Letter of Intent” specifically targeting SMEs in selected productive sectors of the economy. The product is intended to address the challenge of inadequate collateral faced by clients in accessing credit facilities from their bankers by readily providing a reliable source of security or collateral to augment what they have.

It is therefore apparent that the ability to provide a reliable and realisable form of collateral may pre-empt the acceptance of proposal by financial institutions. Thus the ability to mention or propose a form of security may enhance the chance of a request been honoured.

This product is expected to reduce the bottlenecks that immediately confront SMEs in their bid to secure credit facilities.

Product Description / Features
Letter of Intent refers to a guarantee certificate that in itself do not carry any liability, issued to a potential SME within Exim’s operational sectors to facilitate or enhance the chances of SMEs prospecting for credit from financial institutions. The guarantee shall only be issued after Exim has conducted full appraisal on the SME and approval is obtained from the executive committee or board credit committee.
Once approval is received and client meets all the approval conditions, the client shall be issued with a Provisional Guarantee for duration of six months.

Qualifying Criteria
A client applying for Letter of Intent Guarantee should meet the following requirements:

  • Purpose and utilization of the facility to be accessed  (brief business plan)
  • Two – three years financial statement
  • Three months bank statement
  • Two years working experience
  • Operate within the acceptable sectors of Exim
  • Good market outlook
  • Availability of partial security cover

Limit of the Provisional Guarantee Product
The limit on the Letter of Intent Guarantee shall at all material time not exceed Gh¢450,000.00 until it is reviewed after successful implementation.

Tenor of the Product
The tenor for the Letter of Intent Guarantee issued shall be valid for a period of six (6) calendar months subject to review. Additional information will be required for review if client is unsuccessful in securing a credit facility. Review shall be done once for a particular guarantee, after which, if not successful, a new provisional guarantee would have to be applied for.

Types of Guarantees Accessible Under Letter of Intent
The Letter of Intent Guarantee shall cover the following products or a combination of them. The total exposure of Exim shall not at all material time exceed the limit of GH¢450,000.00.

  • Credit Guarantee for SMEs
  • Machinery/Asset Credit Guarantee
  • Credit Guarantee for MFIs

Regularized Pricing

Processing Fees                             -          0.5% to 1.00%                                
Monitoring Fees                              -          1.0%  
Guarantee Commission                  -          3.0% to 3.50% p.a.          

Benefits of “Letter of Intent” to SMEs
The Letter of Intent Product will afford SMEs the following benefits

  • Enhance SMEs capacities to attract funding from FI.
  • Will reduce perceived bottlenecks to credit access by making it faster and easier – i.e improved turnaround time
  • Will give Financing Institutions needed comfort to support SMEs requests.
  • Will enable SMEs to expand their businesses and become more efficient
  • Exim’s Provisional Guarantee enhances the image of SME as it certifies credit-worthiness of its business.

Brief Corporate Profile
Eximguaranty Company Ghana Limited was established in 1994 by the Bank of Ghana to enhance overall financial services delivery with the core mandate of facilitating credit access between Banks and the SME sector of the Ghanaian economy through credit guarantees .

The strategic objective is to grow and develop the capacity of identified SMEs through the modernization of their operations, improve managerial competence, expand production capacities and facilitate the flow of credit from financial institutions. Exim’s intermediary role enables it to deploy customer- driven financial products and services to SMEs engaged in the agricultural, export, services, manufacturing and construction sectors of the economy who ordinarily do not have sufficient collateral to secure loans. Through Exim’s support, these SMEs are empowered to create jobs and wealth to expand Ghana’s development.

The partnership between Exim and the Financial Institutions helps to improve the selection, assessment and supervision of beneficiary clients thereby promoting the growth and development of SMEs in Ghana as a whole.

As a development financial institution, Exim is a member of Association of African Development Finance Institutions (AADFI) and also serve on the Guarantee committee of Guarantee Fund for Private Investment in West Africa (GARI).

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