The Clap
CIB has signed a $50 million credit risk guarantee with the Dutch Entrepreneurship Development Bank (FMO) to support small & medium enterprises.
What
A credit risk guarantee is a promise backed by a third party to guarantee investors that principal & interest payments will be made. In this case, FMO is the credit risk guarantor for the loans the CIB issues to SMEs.
So What
This agreement should help the bank reach those most in need of credit facilities, such as young &/or female entrepreneurs, CIB said in a disclosure.
Now What
This step gives SMEs another path to debt financing, which falls in line with the government’s goal for financial inclusion.