The tender guarantee market is growing

The interest towards EU tender guarantees is growing dynamically. Garantiqa Hitelgarancia Zrt. (Garantiqa) has undertaken a tender repayment guarantee in a value of 2.7 million HUF during the first part of the year, which is almost 3 times as much as the total guarantee undertaking of last year. The company takes on every case at its own risk, without state counter-guarantee.

According to Garantiqa's experience, the interest has increased in an extraordinary way towards tender repayment guarantees. "The tendency is mostly joyful, because it is a proof of a growing willingness to apply for tenders, but the background is that the client's own bank is not willing to give a bank guarantee for repayment, and this is not a good tendency, looking at the situation of the SMEs" - says György Radnai, CEO of Garantiqa.

Garantiqa has reported that the need for guarantees has grown even quicker than the accepted guarantee undertakings, by more than tenfold. "Last year, the value of tender guarantee applications was a little more than 2 billion HUF, now, the value is more than 12 billion during the first part of the year - explains György Radnai. - By the end of the year, the value of new contracts can reach 10 billion HUF" - says Mr. Radnai.

The success of Garantiqa's tender guarantee can among others be explained by that the product's competitiveness has proven to be good also in market competition. Beside the beneficial fee, it has two important advantages. One is that it can also be requested for large amount aids, the second is that there is no need for any cover. The tender guarantee of Garantiqa can be used for both domestic and EU tenders.

According to the CEO, there are two components of the quick success. The number and value of tenders is increasing quickly, but another reason for the growth is that out of the tender possibilities, the banks are more willing to undertake loans aimed to compensate a company's own assets, and are careful about giving bank guarantees that have contributed to the appearance of such concrete tender guarantee products.