The Pooled Finance Development Fund Scheme (PFDF) has been set up by the Central Government of India. The main aim of the Government authorities is to provide credit enhancement facilities to Urban Local Bodies(ULBs) based on their credit worthiness. This will enable them to access market borrowings through state-level pooled mechanism. PFDF is to ensure availability of resources to Urban Local Bodies in order to improve urban infrastructure and ultimately attain the goal of self-sustainability.
The Pooled Finance Development Fund Scheme is aimed at helping smaller municipalities receive funds from alternative sources towards development of infrastructure projects. Under the scheme, ULBs can access enhanced credit facilities in the market on the basis of their creditworthiness. Some of the objectives of the scheme are as follows:
- Boost the growth of municipal bond market
- Decrease the borrowing costs to ULBs courtesy various credit enhancement measures in addition to restructuring of debts
- Increase access of ULBs to financial and capital markets by credit enhancement to State Pooled Finance Entities (SPFEs)
- Boost development of urban infrastructure courtesy efficient financial structuring of various projects.
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