Bank guarantee insurance for exporters

KazExportGarant JSC has launched a new financial support instrument for exporters, "Insurance of Bank Payment Guarantees", the press service of the Ministry of Industry and New Technologies of the Republic of Kazakhstan reports.

"Such guarantees may include advance payment guarantees, tender guarantees and performance guarantees issued by commercial banks at the request of exporters," the press service said in a statement.

According to the ministry, among exporters the greatest interest in this instrument comes from companies carrying out construction and installation work abroad that regularly use bank guarantee services. "This instrument is no less useful for exporters from other sectors of the economy, such as the food and chemical industries," the ministry added.

According to the Ministry of Industry and New Technologies of the Republic of Kazakhstan, the instrument will speed up banks' decisions on issuing guarantees for exporters' obligations to supply goods and services. "Exporters no longer need to 'freeze' their own funds and can free up their credit lines for other production purposes. By using this service, exporters guarantee their customers full performance of obligations under a foreign trade contract," the ministry's press release notes.

According to the ministry, the new instrument will also help increase the competitiveness of domestic exporting companies in tenders and competitions held by foreign customers.

"KazExportGarant JSC will provide this service through the commercial banks that serve domestic companies, which will also help reduce transaction costs and speed up decision-making," the press service of the Ministry of Industry and New Technologies of the Republic of Kazakhstan reports.