The feasibility study highlighted all of the key business environment prerequisites for establishing a Mutual Guarantee Company.

The Private Sector Development Programme’s (PSDP) objective was to enhance the perspective of socio-economic development through strengthening of the private sector. One of the major impediments to Small and Medium Enterprises receiving access to bank loans included the inability to present viable business plans and to meet the collateral requirements set out by the lending institutions.

To address the latter, the establishment of one or more Mutual Guarantee Companies (MGCs) within the context of the PSDP was proposed. The MGC feasibility study highlighted all of the key business environment prerequisites for an MGC including the legal, regulatory and operating framework. It generated three investment scenarios that illustrated possible ownership structures; potential financing sources; requirements for operational set up and activities including services to be delivered; collaboration strategies; investment costs; potential beneficiaries and criteria for selection; financial projections and sensitivity analyses associated with each of these scenarios of project viability. The study highlighted critical factors for success.