Overview
Services of the Nikshep Tatha Karja Surakshan Kosh (Deposit & Credit Guarantee Fund) -DCGF
Nepal's Deposit and Credit Guarantee Fund (DCGF) offers services essential for bolstering financial stability and encouraging economic growth. These services protect depositors and support various sectors through credit guarantees.
Here's an overview of the key services provided by DCGF:
1. Deposit Guarantee Scheme
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Protection for Depositors: This policy guarantees the deposits of individual depositors up to Rs. 5 lakhs in member financial institutions.
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Premium Payment: Imposes a premium rate of 0.16% annually on guaranteed deposits, paid quarterly.
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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
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Loan Guarantee for Livestock Purchase: Covers loans up to Rs. 1,50,000 for livestock purchases.
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Premium Subsidy: The premium rate is 5% per annum, with 80% subsidized by the Government of Nepal.
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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
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Diverse Loan Guarantees: The company guarantees loans up to Rs. 1 million under group/individual guarantee and up to Rs. 2 million with collateral.
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Subsidized Premium Rates: This premium rate is 0.8% per annum, with a 50% subsidy.
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Compensation for Default: Provides 75% compensation of the outstanding loan balance at the due date.
4. SME Credit Guarantee
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Guarantee for SME Loans: This guarantee covers loans up to Rs. 10 million and is extendable up to Rs. 30 million with prior approval.
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Balanced Premium Payment: The premium rate is 0.6% annually, with a 50% government subsidy.
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Compensation Structure: 80% compensation for loans up to Rs. 5 million and 70% for higher loans.
5. Agricultural Credit Guarantee
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Agricultural Loan Security: Guarantees up to Rs. 10 million for agriculture sector loans.
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Premium and Compensation: This is a similar premium and compensation structure as the SME Credit Guarantee.
6. Educational Loan and Educated Unemployed Business Credit Guarantee
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Support for Education and Entrepreneurship: Guarantees up to Rs. 1 million for education loans and Rs. 5 lakh for business loans for educated unemployed.
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Premium and Compensation: This is a 1% annual premium with a 5a 0% subsidy and compensation of up to 80% of the outstanding loan balance.
7. Export Credit Guarantee
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Boost for Export Businesses: Guarantees loans up to Rs. 30 million for export-oriented businesses.
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Risk Mitigation: Premium rate of 1% per annum with a 50% government subsidy.
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Compensation Policy: Varied compensation rates depending on the loan amount.
Overall Impact
The services offered by DCGF significantly contribute to the following:
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Enhancing Financial Confidence: Protects depositors and gives them confidence in the financial system.
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Promoting Sectoral Growth: Encourages lending in agriculture, SMEs, and exports.
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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.
