Kathmandu. KATHMANDU: The Deposit and Credit Guarantee Fund (CDC) and Forward Microfinance Laghubitta Bittiya Sanstha Limited have signed an agreement for loan securitization. The agreement was signed as per the Micro Credit Additional Security Scheme, 2082 introduced by the Fund with the objective of providing protection against loss of micro credit issued by banks and financial institutions due to death, disability or loss of project of borrowers and spouses of single households.
The agreement was signed by CEO of both the organizations in the presence of Deputy Chief Executive Officer and Departmental Heads of Forward Microfinance, Departmental Manager of the Fund and employees of branch offices.
According to the agreement, the fund will pay 75 percent claim in wilful default of the loan issued by Forward Microfinance and Backward Classes as per the provision under the Fund’s Microfinance and Poor Category Credit Protection Program and 100 percent claim payment in case the loan is defaulted due to circumstances such as death, disability and project failure.
Under this agreement, the forward microfinance member will have to pay 0.4 percent plus 0.15 percent plus 0.15 percent security fee. Through this agreement, the Forward Microfinance Fund expects that the institutional loan issued to the people of the poor class for the operation of micro and small enterprises will be hundred percent secured and the Forward Microfinance will be free from the hassle of making arrangements including collateral of movable and immovable property for the security of the loan.
