Overview
Services of the Nikshep Tatha Karja Surakshan Kosh (Deposit & Credit Guarantee Fund) -DCGF
The Deposit and Credit Guarantee Fund (DCGF) in Nepal offers a range of services essential for bolstering financial stability and encouraging economic growth. These services are geared towards protecting depositors and supporting various sectors through credit guarantees. Here's an overview of the key services provided by DCGF:
1. Deposit Guarantee Scheme
- Protection for Depositors: Guarantees the deposits of individual depositors up to Rs. 5 lakhs in member financial institutions.
- Premium Payment: Imposes a premium rate of 0.16% annually on guaranteed deposits, paid quarterly.
- Support in Liquidation: In the event of member institutions' liquidation, DCGF compensates eligible depositors based on lists provided by the liquidator.
2. Livestock Credit Guarantee
- Loan Guarantee for Livestock Purchase: Covers loans up to Rs. 1,50,000 for livestock purchases.
- Premium Subsidy: Premium rate is 5% per annum, with 80% subsidized by the Government of Nepal.
- Compensation for Loss: Pays 90% of the guaranteed amount in case of livestock death and 50% for unproductive livestock.
3. Microfinance and Deprived Sector Credit Guarantee
- Diverse Loan Guarantees: Guarantees loans up to Rs. 1 million under group/individual guarantee and up to Rs. 2 million with collateral.
- Subsidized Premium Rates: Premium rate of 0.8% per annum, with 50% subsidy.
- Compensation for Default: Provides 75% compensation of the outstanding loan balance at the due date.
4. SME Credit Guarantee
- Guarantee for SME Loans: Covers loans up to Rs. 10 million, extendable up to Rs. 30 million with prior approval.
- Balanced Premium Payment: Premium rate of 0.6% per annum, with 50% government subsidy.
- Compensation Structure: 80% compensation for loans up to Rs. 5 million and 70% for higher loans.
5. Agricultural Credit Guarantee
- Agricultural Loan Security: Guarantees up to Rs. 10 million for agriculture sector loans.
- Premium and Compensation: Similar premium and compensation structure as the SME Credit Guarantee.
6. Educational Loan and Educated Unemployed Business Credit Guarantee
- Support for Education and Entrepreneurship: Guarantees up to Rs. 1 million for education loans and Rs. 5 lakh for business loans for educated unemployed.
- Premium and Compensation: 1% annual premium with 50% subsidy; compensation up to 80% of the outstanding loan balance.
7. Export Credit Guarantee
- Boost for Export Businesses: Guarantees loans up to Rs. 30 million for export-oriented businesses.
- Risk Mitigation: Premium rate of 1% per annum with a 50% government subsidy.
- Compensation Policy: Varied compensation rates depending on the loan amount.
Overall Impact
The services offered by DCGF significantly contribute to:
- Enhancing Financial Confidence: Protects depositors and gives them confidence in the financial system.
- Promoting Sectoral Growth: Encourages lending in key sectors like agriculture, SMEs, and exports.
- Economic Development: Supports overall economic development by facilitating credit access and managing financial risks.
Through these services, DCGF plays a crucial role in strengthening Nepal's financial sector, supporting various economic activities, and safeguarding the interests of depositors and borrowers alike.
