Guarantee For Loans To Smes

Guarantee System for financing granted to small and medium-sized undertakings operating in the manufacturing, services and innovative sectors.

This guarantee scheme was  set up  by Article 24 of Law No 2002-101 of 17 December 2002, establishing the Finance Law for 2003, to guarantee certain categories of loans granted by credit institutions to small and medium-sized enterprises operating in the manufacturing and services sectors and certain categories of equity investments by venture capital companies, (S.I.C.A.R) venture capital mutual funds (F.C.P.C.R)and seed capital funds (F.A) in the capital of such undertakings.

SOTUGAR,  a public limited company whose  share capital is held by the  State and  domestic banks,  has been  entrusted with  the management of  the guarantee scheme pursuant to an agreement signed between the Company and the Ministry of Finance.

1-Activities Eligible For The Guarantee :
  • Activities of the manufacturing industries annexed to decree n° 94-492 of 28 February 1994, establishing the lists of activities by sector provided  for  by articles 1, 2 , and 27 of  the Investment Incentives Code, as  amended  and supplemented by subsequent texts,
  • Computer related activities, services in relation to software production, research and development, studies assistance and consultancy services,  spin-offs, environmental and leisure services, security and remote monitorng on industrial plants, vehicle repair. and maintenance.
  • Projects eligible for funding under the Information Technology Innovation Incentive Scheme (RITI).
2-Size Of Investment Concerned

The following projects may receive funding  under the Guarantee System:

  • The Start-up projects whose investment cost does not exceed 15 million dinars including working capital.
  • The expansion projects whose overall investment cost, including net fixed assets, does not exceed 15 million dinars.
  • The creation and extension projects eligible for RITI assistance and whose investment cost does not exceed 500 thousand dinars.
3-Loans And Equity Investments Eligible For Guarantee
  • Medium and long term loans
  • Short term facilities extended to undertakings that have been operating for less than five (5) years,
  • Financing granted  under equipment leasing  contracts,
  • Equity investments by venture capital companies (SICARs), venture capital mutal funds (F.C.P.R), and seed capital  funds (F.A).
4-Forms And Intervention Methods Of The Guarantee Scheme:
  • Refinancing of one half of the loan and assumption of treasury interest on the other half of a percentage of the amounts outstanding  on account of the principal amounts  of  covered loans, in accordance with the agreed apportioning of coverage  of  the loan deemed irrecoverable  between the intervening  financing institution and the Guarantee Scheme at the stage of litigation.
  • Assumption of  a proportion ranging from 50 % to 75% of the amounts of loans outstanding and  equity investments covered by the Guarantee Scheme, according to the following distribution :

1.For projects carried out in regional development areas, projects initiated by new entreprneurs and projects benefiting from funding under the Information Technology Innovation Incentive Scheme (RITI) and seed funding:

    • Assumption of 75%  by  the Guarantee Scheme
    • Assumption of 25%  by the bank, the SICAR or the FCPR

2.The other projects :

    • Assumption of 60% by the Guarantee Scheme
    • Assumption  of 25%  by the bank, the SICAR or the FCPR

3.In respect of leasing operations :

    • Assumption of 50%  by  the Guarantee Scheme
    • Assumption of 50%  by the leasing company
  • Assumption of 75%  of costs of proceedings for the collection of ourstanding loans with respect to projects carried out in regional and 50%  concerning projects  located in other areas.