Bank Guarantee-i (Al Kafalah)
Government and GLCs procurement contracts require the submission of Bank Guarantee that generally amounts up to 5% of the contract value.
Without any existing bank facility, the standard requirement would be 1:1 fixed deposit (FD) for any issuance of the required Bank Guarantee. The process to secure a Bank Guarantee can be time consuming and daunting. Banks would require an upfront security deposit of up to 40% prior to issuance of the guarantee.
Under Government and GLCs procurement contracts, performance guarantees are issued under two categories
Bank Guarantee
Insurance Guarantee
Financial Institute Guarantee
FinansCap can issue performance guarantees on your behalf and alleviate your challenges in this aspect.
What You Need to Know
- One of the requirements for Government and GLCs procurement contracts is a performance guarantee, at 2.5% to 5% of the contract value.
- A performance guarantee is a requirement prior to commencement of contracts.
- FinansCap is an approved Syarikat Kewangan for issuance of Bon Perlaksanaan.
- A commission fee of 0.4% is chargeable monthly during the validity period.
We also offer Advance Payment Guarantees. This guarantee works in a similar manner to Performance Guarantees except that the Government and GLCs is entitled to reclaim the advanced payment made if the contractor does not complete the job awarded.
How to Apply
Step 1
Step 2
Step 3
Step 4
Step 1
Receive written confirmation (Letter of Offer, Letter of Award, signed contract) from the Government and GLCs on award of project.
Step 2
Prepare 3 signed copies of Bai’ Dayn Confirmation. The document should be signed for acknowledgement by the contract awarder.
Step 3
Compile the following documents and submit to FinansCap.
- Original Letter of Offer (LO) or Contract
- Format of Performance Guarantee
- 1 copy of Bai’ Dayn Confirmation – signed for acknowledgement by the contract awarder.
- Security Deposit – 30% of Performance Bond and other charges as advised.
- Undertaking and Indemnity Letter
Step 4
Upon receiving the documents, FinansCap will issue the Performance Guarantee to you within three working days*.
*Subject to completion of all documents submitted. Terms and conditions apply.
As your financier partner with over two decades of experience, we will work closely with you to arrange for this specific bank facility. Such guarantees are an indicator of our confidence in your business, and at the same time, protecting yours and other project owners’ interest as well.
Fill out the form below now to discuss on the opportunities available to work together.