LOAN SECURITY & RISK FUND
The frequent premature death of borrowers is a big impediment for the microfinance program by which MFIs have been encountering a lot of troubles in attaining sustainability as well as improving productivity to reach their desired goals.In recent years, the average life expectancy of people of our country increased significantly. In spite of this improvement large number of people of the lower-income segment still die at middle age. Particularly, women constitute the most vulnerable group to death due to health complications and many of them die before entering old age. This has a negative impact in achieving sustainable poverty alleviation as the successor’s force to accept the financial burden of the deceased. Obligation to repay the unpaid debts fall on the heirs of the deceased that turns into a complex situation for both successors of late borrowers and the service provider institution as well. On the other hand female borrowers after death of their husband suffer from an uncertain financial state as her spouse is the main utilizer/investor of the borrowed money.
Srizony Foundation designed an innovative Loan Security & Risk Fund that addresses aforesaid problems efficiently freeing the successors of deceased debtors from the obligation of repaying unpaid credit.
For taking this benefit of Srizony Foundation female borrowers have to pay BDT 7 (Seven) for per thousand taka loan to avail coverage for her as well as for her spouse/guardian whilst male borrowers have to pay BDT 3 (three) for per thousand taka loan to avail coverage only for him in every loan cycle. The statistics of the Loan Security & Risk Fund of Srizony Foundation is as follows:
|Category of Client||Subscription for each loan cycle||Payment Mode||Term||Subscription Mode||Management of LSRF|
|All loan clients must contribute and participate in this product by paying a fixed subscription in each loan cycle.||BDT 3 (for loanee) or BDT 7 (for loanee and his/her spouse or guardian) per thousand loan disbursement.||Non-refundable but in case of death of Borrower or Borrower’s spouse, the total outstanding loan is written off||Continue throughout loan cycle of borrower||The borrower will pay LSRF before receiving the loan amount.||Srizoy Foundation|