Individual Credit Guarantees Guarantees applied to a single loan product. Key Features The guarantor (e.g., a government, bank, or insurance company) assumes the credit risk of a specific borrower.Tailored to the specific borrower’s needs and risk profile.Often involves detailed assessment of the borrower’s creditworthiness. Examples A government guarantee for a specific business loan.Bank guarantees for trade finance or project-specific guarantees. Advantages Personalized, reducing credit risk for the lender.Allows borrowers with weaker credit to access financing. Disadvantages Labor-intensive due to the need for individual assessments.High administrative and operational costs.Risk is concentrated on a single borrower.
