Bank guarantees are an increasingly popular financial product. The development and improvement of the procurement system, the increase in quotas for participation in public procurement for small and microbusinesses, automation and digitalization of registration processes. All these factors trigger the rapid growth of demand for bank guarantees, the press service of AO Solid Bank reported to PrimaMedia.
Some analysts predicted a slowdown in the bank guarantee market, linking the pessimistic forecast with the amendments of Law 44-FZ, which came into force from June 1, 2019 (71-FZ of May 1, 2019) . But their expectations were not met, and the total guarantee portfolio grew in 2019, with commercial banks demonstrating the most intensive pace. As a result, the share of private banks in the guarantee market has gradually increased to 12% (Expert RA). The attractiveness of the guarantee business can also be explained through the low default rate compared to lending: in average, between 2015 and early 2019, the level of disclosure of guarantees did not exceed 0.5%.