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CHALLENGES/CONCERNS. Financial Institutions/Bank - Evaluation of RECP project: Traditional Management Capacity Credit worthiness of the company Risk Assessment Business plan Securities/Collaterals - Environmental Aspects often Undervalued -Loans Unattractive
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CHALLENGES/CONCERNS Financial Institutions/Bank - Evaluation of RECP project: Traditional Management Capacity Credit worthiness of the company Risk Assessment Business plan Securities/Collaterals -Environmental Aspects often Undervalued -Loans Unattractive -Procedure complicated and time consuming
CHALLENGES/CONCERNS • Government/Industrial Development Agencies • Lack of conducive Policy framework • Lack of customized Financial Instruments/credit schemes • Lack of Fiscal instruments like Public procurement, Low cost of natural resources, Incentives for EOP
Institutional/RECP promoting agencies Lack of experience in - Preparing Bankable RECP investment projects - RECP Auditing/Assessment incl. Social & Environmental criteria - Total Costing of Project incl. credit risk (Environmental liabilities, health costs, cleanup costs, Environmental litigation CHALLENGES/CONCERNS
INSTRUMENTS Credit Lines & loans with Incentive Characteristics: Performance Bonus, Interest reduction Etc. Strategies for small RECP investments Guarantee/Collaterals Leasing RECP Investments Risk Sharing Product (RSP)
INSTRUMENTS • Increased participation of commercial credit providers • Increased marketing penetration of CP goods and services • Capacity Building • Certification
GENERIC SCHEMES • Enterprise Capital Fund (ECF) Mix of Public & Private money • Small firm Loan Guarantee (SFLG) Government as Guarantor • Mutual Credit Guarantee Trust Funds (MCGTF) • Dedicated credit Lines like GCL • RECP revolving funds