Financial Guarantee Market: Size, Share, Growth, Analysis, Key Players, Revenue, Growth | Valuates Reports

Financial Guarantee Market Statistics 2030
The global financial guarantee market size was valued at $28.70 billion in 2020 and is projected to reach $71.93 billion by 2030, growing at a CAGR of 9.6% from 2021 to 2030. A financial guarantee in the corporate world is a non-cancellable indemnity. This is a bond backed by an insurer or other secure financial institution. It gives investors a guarantee towards the payment of principal and interest amounts within a contract. Many insurance companies specialize in financial guarantees and similar products used by debt issuers as a way of attracting investors. Moreover, the guarantee gives investors comfort that the investment will be repaid if the securities issuer does not fulfill the contractual obligation to make timely payments.
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Due to increased uncertainty and protectionism in global trade, shifts in supply chain demands, and business closures across several industry verticals, the COVID-19 pandemic have had a negative impact on the financial guarantee market. Furthermore, in order to stop the virus from spreading, numerous government authorities in various nations had enacted strict trade restrictions, resulting in geopolitical tensions and a rapid shift in trade patterns.
Financial guarantee helps the businesses to recover the loss owing to deferred payments from debtors. In addition, financial guarantee reduces the risk and mistrust between seller and consumer by acting as an assurer. Therefore, increasing financial risk involved in business transactions in driving the growth of the market. The financial guarantees require less documentation and therefore, processing of loan becomes easier and simple for the banks. Therefore, this is a major growth factor for the growth of the market. However, an individual with a poor credit history cannot obtain a financial guarantee for the business or other activities. Thus, strict assessment by the banks before providing financial guarantee is restraining the growth of the market. Contrarily, the automation of document verification and credibility checking procedures have increased the efficiency of the banks. Moreover, the automation of the documentation procedures has decreased loan application delays and made it more convenient for consumers. Thus, digitalization of banking procedures to obtain financial guarantee will provide various growth opportunities with technological advancements in future.
The report focuses on growth prospects, restraints, and trends of the financial guarantee market analysis. The study provides Porter's five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers, on the financial guarantee market.
Top Impacting Factors
Rise in Import and Export Activities in Developing Countries
Consumer items, motor vehicles & components, electronic & electrical equipment, industrial machinery, industrial chemicals, and plastic & rubber products are all imported by many countries. Furthermore, numerous nations export crude oil, automobiles, and gold. These items are in high demand, and is expected to continue to this trend in the upcoming years. As a result, surge in import and export activity is expected to give lucrative opportunities for the financial guarantee sector to expand, as more buyers and sellers seek financial guarantees from banks. Thus, rise import and export activities in developing countries is expected to open new avenues for the growth of the market.
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Financial Guarantee Market Segments
Financial Guarantee Market by Product Type
• Bank Guarantees
• Documentary Letter of Credit
• Standby Letter of Credit (SBLC)
• Receivables Financing
• Others
Financial Guarantee Market by Enterprise Size
• Small Enterprises
• Medium-sized Enterprises
• Large Enterprises
Leading Players in the Financial Guarantee Market
• Asian Development Bank
• BNP Paribas
• Barclays
• Bank of Montreal
• Citibank
• HSBC
• ICBC
• National Bank of Canada
• SINOSURE
• Scotia Bank
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