The PCGF operations are conducted through legitimate financial intermediaries only, that is, credit granters (banks and microfinance institutions) having entered into a special Participation Agreement with FDI. The special Participation Agreement is a general agreement that entitles the signer to request guarantees from FDI for eligible existing credits to enterprises having been affected by the earthquake.
Specific guarantee requests are assessed according to 4 criteria: a) the situation and performance of the final beneficiary (the enterprise) before the earthquake; b) the feasibility of the enterprise’s activity resumption plan; c) the enterprise capacity to secure the restructured debt service through operational cash flows; d) the nature of the impact of the project on the environment and/or the quality of the environmental and social management system in place.
Should the guarantee requested be approved, FDI issues a guarantee letter in favor of the enterprise, made payable to the bank, for a validity period of up to 5 years. The FDI’s letter of guarantee may cover up to 50% of the restructured underlying loan.
The direct beneficiary of the FDI’s letter of guarantee under the PCGF may also be a microfinance institution (MFI) affiliated to a bank or a credit union (cooperative) operating under the supervision of the Central Bank. In the case of an IMF, FDI will issue guarantees on a portfolio basis only, given the small amount of the loans the IMFs’ portfolio is made of. For the purpose of the PCGF a small loan is a loan not exceeding 2.5 millions gourdes.
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