Credit Guarantee System (CGS)

The Guarantee System of loans granted to Small and Meduim Enterprises (SMEs) in manufacturing industries and services and shareholdings of Capital Risk Investment Companies and Common Funds of Risk Investment (SICAR & CFRI) in their capital.

Established by article 24 of the law n° 2002-101 of 17 December 2002, the finance law for the year 2003, the Credit Guarantee System is intended to guarantee certain categories of loans granted by the credit institutions to small and medium sized enterprises in industry and services and certain categories of shareholdings of Capital Risk Investment Companies and Common Funds of Risk Investment (SICAR & CFRI) in their capital.
SOTUGAR manages the CGS under an agreement concluded with the Ministry of Finance which provides details on the management, conditions and methods by which this CGS operates.

1- Eligible Activities  for  the CGS:

  • Activities of the manufacturing industries annexed to the decree n° 94-492 of February 28, 1994, determining the lists of the activities depending of the sectors covered by articles 1,2,3 and 27 of the  incentive  investments code as modified and completed by the subsequent texts,
  • Activities of computer sciences, services related to software production, services of research and development, services of study, counsel, assistance, maintenance services and repair of vehicles, environment, leisure, agricultural mechanization,
  • Eligible Projects for the Incentive plan for Innovation in Information Technology (RITI).

2- Size of the concerned investments

Can profit from the interventions of the CGS, investments initiated by small and medium industrial and services enterprises in one of the activities mentioned above and which:

  • The amount of investment does not exceed 5 million dinars, including the working capital for the creation projects,
  • The amount of global investment including the fixed assets should not exceed 5 million dinars for the extension projects.
3- Eligible loans and shareholdings for  the CGS:
  • Medium and long term loans
  • Short-term loans granted to enterprises whose term of entry into activity does not exceed  3 years,
  • financing under a leasing contracts,
  • Shareholdings of Capital Risk Investment Companies (SICAR), Common Funds of Risk Investment (CFRI) and Fonds d’Amorçages (FA).
4- Formes et modalités d’intervention du Système de Garantie :
  • Refinancing of the half and taking in charge the treasury interests of the other half of principal unpaid amounts of the loans and guarantee a return on a proportion of shareholdings in capital accepted to the guaranty in accordance with  the distribution of support of the irrecoverable amounts of the loans and shareholdings between the CGS and the intervening institution, during the period of pursuit and collect disputed loans,
    The treasury interests and a return mentioned above are determined on the basis of the unpaid amount of the credits for the credit institutions and of the shareholdings of SICAR, CFRI and FA, and of the average rate of the BCT,
  • Taking in charge a proportion going from 50% to 75% of the irrecoverable amounts of the credits and shareholdings guaranteed according to the following below :
    • For   projects initiated in regional development areas, New promoters, FA and  New Technology of Information (RITI):
      –  75 % by CGS,
      –  25% by Bank or SICAR or CFRI or FA .
    • For the others projects :
      – 60% by CGS,
      – 40% by Bank or SICAR or CFRI.
    • For financing under a  leasing contracts:
      – 50% by CGS,
      – 50% by leasing company.
  • Taking in charge 75% of expenses of pursuit and collect disputed loans to projects located in regional development areas and 50% for projects located in others areas.