BPRD
Circular Letter No. 19 of 2009 |
July 16, 2009 |
The
Presidents/Chief Executives,
All Banks/DFIs,
Dear
Sir/Madam,
Amendments in Microfinance Credit Guarantee Facility (“MCGF”)
Please refer to BPRD Circular No. 10 dated 26 May 2009
on the subject.
2.
In partial modification of the guidelines for Microfinance
Credit Guarantee Facility issued vide BPRD Circular
No. 10 dated 26 May 2009, to make the provisions more
flexible for commercial banks/DFIs to provide whole-sale
funds to eligible Microfinance Banks/Institutions, clause
5(i) of the MCGF guidelines has been amended as under.
Amended
Clause 5 (i): The lending institution shall
provide financing after carrying out proper due diligence
of the MFB/MFI, keeping in view the risk profile of
the borrower and in light of policy developed, duly
approved by its Board of Directors, for providing financing
under the MCGF. In case, the microfinance lending policy
duly approved from the Board of Director is not in existence,
such policy shall be made within two years of the first
disbursement under the facility; however, it shall be
mandatory if the funding under the facility exceeds
20 percent of the lending bank’s equity, prior
to disbursement under the facility.
3.
Further, it is clarified that the MCGF guarantee (to
the extent of risk coverage issued by SBP) is recognized
for capital adequacy purpose as per BSD circular No.
8 issued on 27 June 2006 and will carry 0% risk weight
under Credit Risk Mitigation (CRM).
Please
acknowledge receipt.
Encl:
Amended Guidelines
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Yours truly,
Sd/=
(Muhammad Akhtar Javed)
Senior Joint Director
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