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Transactions Guarantee Brochure

Introduction to the Cooperative Investment Guarantee Fund

The Cooperative Investment Guarantee Fund was established based on the resolution of Council of Ministers on March 1, 2010 for the purpose of implementing social justice, providing economic independence of the society and providing supports to the investments made in seeking social economic independence and supporting university/academic investments. The fund is one of the institutes under umbrella of the Ministry of Cooperation, Labor and Social Welfare and is presently active.

In addition, by virtue of Central Bank’s notification number 47302 dated  May 22, 2011, the Fund’s services have been introduced to any banks and credit/ financial institutes that work under official permit of the Central Bank to benefit from its cooperation.

The most important lines of activities

A-  To guarantee the credits and investments, obligations, claims and transactions carried out by cooperative companies

B-   To guaranty the principal and interests of the facilities awarded to the cooperative companies by banks and financial/ credit institutes (holders of Central Bank’s official permit)


Financing by providing guarantees for cooperative companies’ transactions

By virtue of this guarantee, the Fund guarantees the payment to be made by an applicant through the guarantee letter of the Fund to ensure the payments to be made by an applicant for lease or any other financial obligations on a certain maturity date.

Guarantee methods

This type of guarantee is implementable in two methods namely:

1)    Direct guarantee

2)    Indirect guarantee

First method: Direct guarantee

Cooperative company

                   Credit study                                      Delivery of materials and goods


                   Guarantee fund    Sending guarantee letter Supplier (seller)



In the course of this process, the Fund’s guarantee letter can replace the internal bank letters of credit.

In this method, the Fund guarantees the payment of goods price on a certain maturity date and the cooperative will be able to increase its purchase power and perform its transactions by the support of transactions Fund.

This method is able to supply the consumable raw materials of he producer and provide the needs of producers and consumers to materials in the cooperatives, and meet the demands of members to materials and commodities they need.

Second method: Indirect guarantee

Cooperative company                        Delivery of materials and commodities         Supplier (seller)

Credit studies                                                              L/C opening

Guarantee fund                      Sending guaranty letter          Bank or credit institutes

In this method, the transaction between the applicant and supplier takes place through opening L/C at sight or long-term L/C and the bank pays the settled amount to the supplier after receiving the necessary doucments and papers. The banks; however, receive sufficient guarantees from the applicant in advance in order to open the requested L/C.

In this method, the Fund guarantees the cooperative company’s fulfillment of its obligations before the bank.

Major elements in the first method

Applicant: The cooperative company and/or the union that has applied for receiving the guaranty letter.

Supplier: The beneficiary of the guaranty letter that according to the Fund’s regulation, the priority in beneficiaries goes to one of the governmental organizations, public and state-owned entities, governmental and state-owned enterprises with government owning more than 50 percent of their stocks and companies enlisted in securities exchange and over-counter security exchange organization (Bourse and Fara Bourse); as well as agricultural sector support funds,  national unions and cooperatives; and if as such are not present, other reliable and creditable companies/firms.

Fund: Cooperative Investment Guarantee Fund which acts as transaction guarantor.

Major elements in the second method

Applicant: The cooperative company and/or union that has applied for receiving the guaranty letter.

Supplier: Any company that supplies legal local goods and commodities or foreign firms that have the capability to supply the object of transaction.

Bank: The beneficiary of the guaranty letters which could be any banks or non-bank credit institutes that hold Central Bank’s permit.

Fund: The Cooperative Investment Guarantee Fund which acts as the transaction guarantor.

Regulations in the issuance of guaranty letter

Necessary documents:

- Application for the issuance of guaranty letter, lodged by the applicant, together with the minutes of board of directors’ meeting on their approving the receipt of guaranty letter.

- Written announcement of the beneficiary on accepting the guaranty letters that are issued by the Fund

- Copies of identity documents of the cooperative company and its managers (such as articles of association, official gazette [that published the company’s notices], national ID. card of managers)

- Last balance sheet, profit/loss statement of the company, the last statement of accounts of the company from banks, the situation of the liabilities and bad checks (if any) of the cooperative company and managers in banks and credit institutes

-Applicant’s validation by studying the indexes that reveal its financial, economic, managerial situations, activities period, its credit and place in the relevant business activities

- Maximum validity of the guaranty letters that are issued- except the credit guarantee letters- is one year.

There is no restriction in extending the guaranty letters after this period (expiry date).

Calculation of fee

The fee for this type of guaranty letters is 50% of the fee charged in banking system.

Securities and deposits:

-         The amount and types of securities will be determined after running validation studies for the applicant and beneficiary and proportion to the transactions risks.

-         Remittance of minimum 10% of the guaranty letter to the Fund’s centralized account.



Building number 1: Number 13, Shahid Nezhad Key St. Mirza-e-Shirazi Street, Karimkhan Zand Street, Tehran, Tel. (021) 8842609-11

Building number 2: Number 68, Baradaran Mozafar Street, Bozorgmehr Street, Valiasr Street, Tehran, Tel. (021) 66499630-32

Rapport the banks and institutions
Central Building Address: Tehran / Karimkhan street / avenue Mirza Shirazi / martyr Fereydoun Ave Nzhadky / 13
Director Office: 3-88845242
Tel: 11-88842609 Fax: 88845241
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