Short Term Loans – Payday Loans For Livet Sat, 18 Sep 2021 06:43:00 +0000 en-US hourly 1 Short Term Loans – Payday Loans For Livet 32 32 Pag-IBIG extends the terms of payment of the cash loan to 3 years Sat, 18 Sep 2021 06:43:00 +0000


MANILA, Philippines – The state-owned real estate development pool or Pag-IBIG has eased its cash lending by extending its payment term to three years, senior officials said last week.

In a statement Thursday, Pag-IBIG said it continues to improve its programs to meet the needs of its members.

“This year, we are extending the term of our cash loans from two to three years to give borrowers more time to repay their loans, and more importantly, to reduce their monthly payments,” said Secretary Eduardo del Rosario, President of the Department of Human Settlements and Urban Development (DHSUD) and the Board of Directors of the Pag-IBIG Fund composed of 11 members.

The Pag-IBIG Fund’s cash loans are in the form of a multipurpose loan (MPL) and a disaster loan (CL) for disaster areas. Also known as Short Term Loans (STLs), MPL and CL are affordable and easily accessible sources of funds for its members.

According to the agency, qualified members can borrow up to 80 percent of their total Pag-IBIG regular savings, which consists of their monthly savings, matching contributions from their employer and dividends earned annually.

The proceeds can then be used to pay for school fees, medical bills, minor home improvements, as capital for small businesses, or as an emergency disaster fund.

“Pag-IBIG cash loans are paid over 24 months. And now our members have the option to extend the term to 36 months. By choosing a longer payout period, members can benefit from significantly lower monthly payouts, ”Pag-IBIG Fund CEO Acmad Rizaldy Moti said.

He noted that they have reduced the monthly payments by almost a third with the lengthening of the payment period. With an average cash loan of 20,000 pesos, members pay 1,016.52 pesos per month for a multipurpose loan and 897.23 pesos per month for a disaster loan with a two-year payment term. .

However, with the new three-year payment term option, the amount of each monthly payment will be reduced to just P 734.57 per month for a versatile loan and P 615.72 per month for a disaster loan.

Pag-IBIG said that with payments spread over a longer period, monthly payments have been reduced by 28% for a multipurpose loan and 31% for a disaster loan.

“We recognize that these are difficult times and we are doing everything possible to help our members as the health emergency continues. From January to July alone, we released 25.42 billion pesos in cash loans to help over 1.1 million members, ”Moti said.

“We are ready to help more members in the months to come, now that the extended payment deadline has made our cash loans even more affordable. We have also made the loan application process safer and more convenient by accepting loan applications online through the virtual Pag-IBIG, ”he added.


Pag-IBIG collects over $ 25 billion in savings in 2021

The Pag-IBIG fund marks milestones despite the pandemic


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Central bank liquidity and its impact on banks and global economies Fri, 17 Sep 2021 05:00:42 +0000

Through Abhik Agrawal, Senior Senior Product Manager, Oracle Financial Services

The Covid-19 pandemic has affected all economies, large and small, across the world. Central banks everywhere have handled the situation proactively and have succeeded in injecting a large amount of liquidity into the banks through various means. However, due to the widespread uncertainty caused by the pandemic, banks are reluctant to lend and consumers are reluctant to resort to credit. This article highlights the negative impact that excess liquidity can have on banks and economies if adequate demand is not created.


WAs the entire world grappled with the pandemic, central banks around the world were better prepared to tackle the economic impact it caused. The experience and lessons learned from previous crises have served to inform central banks’ response to the pandemic. They pushed out a huge amount of liquidity to keep the banks afloat and help the economy as a whole during this time of magnanimous stress.

Here are some common actions central banks take to inject liquidity into banking institutions:

  • Rate cut: Several rounds of rate cuts have been applied by central banks around the world for short-term loans to banking institutions, resulting in excess liquidity between banks. A few central banks even cut rates to zero and below zero levels. The US Federal Reserve cut its key rates for short-term loans from 1% and 1.25% to 0% and 0.25%. Some European banks lowered the rate to negative.
  • Quantitative Easing (QE): Quantitative Easing, a brainchild of the Bank of Japan, is a way of injecting liquidity into the markets through banks. It is now widely used by central banks around the world. QE is part of monetary policy and is effective when short-term rates are close to zero. As part of quantitative easing programs, central banks buy long-term government bonds and other securities and increase the money supply. For example, in response to COVID-19, the U.S. Federal Reserve announced a more than $ 700 billion quantitative easing plan and then bolstered it with a commitment to buy at least $ 80 billion and $ 40 billion. dollars per month in government securities and mortgages respectively. securities.
  • Relaxation of regulatory requirements: In view of the crisis, central banks have relaxed some regulatory requirements in terms of capital and liquidity. The Reserve Bank of India has postponed the NSFR’s continuation directive for six months, from April 1, 2020 to October 1, 2020. The liquidity coverage maintenance ratio has also been reduced from 100% to 80% for a few months.
  • Discount window: A discount window is used by central banks for short-term loans, mainly overnight. Banks have reduced the rate on loans through the discount window and have also increased the term of loans to ensure adequate liquidity with banking institutions. For example, the US Federal Reserve lowered the rate it charges banks for loans at its discount window by 2 percentage points, from 2.25% to 0.25%.
  • International exchange line: The US Fed opened international swap lines, which are essentially an emergency money pipeline, to many central banks, which needed US dollars, and it also cut the rate on existing lines.

There are many other measures taken by central banks targeting direct lending to consumer or securities markets, such as increasing the three-month moratorium period, direct lending to businesses, such as the Consumer Credit Facility, primary market companies of the US Fed, the Money Market Mutual Fund. Ease (MMMFF), etc. (But for this article, I’ll focus on the measures that resulted in direct central bank lending to other banks.)

Actions by central banks to keep banks sufficiently liquidated through the stimulus packages were well on time and much needed, but the surge in liquidity alone is not enough to cope with the situation. It is important that the excess funds with the banks pass into the hands of creditworthy borrowers and that economic activities gradually recover until the pre-pandemic era.

But for several reasons, the liquidity that was pumped into the banking system did not result in proportionate lending:

  • Refusal of banks to lend: Due to the potential negative impact of the pandemic on jobs and businesses, the credit rating of borrowers and the value of collateral against which the bank lends may decline. This makes banks skeptical about lending.
  • Provision for potential losses: Banks set aside more funds for potential losses on existing loans due to the possibility that borrowers’ credit quality will decline due to lower economic activities. A study published in the March 2021 BRI quarterly review shows that the provision for the first half of 2020 was three times compared to the second half of 2019.
  • Less credit request: Many businesses, especially small businesses, have suffered greatly from foreclosure restrictions. The unemployment rate has also increased. This has resulted in uncertain income streams for individuals and businesses, resulting in lower demand for credit.
  • Operational issues: Banks in many European countries and countries like India, which are facing the second or third wave of the pandemic, are not adequately staffed due to restrictions imposed by local authorities or absenteeism for fear of the pandemic. For many banks, the focus is on ensuring the safety of their staff and carrying out the most essential tasks rather than growing the business.

Banks are sitting on a lot of cash. Although this current level will not be maintained for long, the banks will soon start pumping this money into the economy. However, if this happens without creating adequate demand, it can prove counterproductive for banking institutions and economies in the following ways:

  • Inflation: The push of money supply to banks and the economy in general is likely to increase inflation. If this is not followed by an increase in the growth of supply and demand for credit, the situation may worsen and the economy may sink into stagflation. Stagflation is a condition where inflation rises, but economic growth stagnates.
  • High risk loans: With the accumulation of liquidity and low interest rates, banks may be drawn into high risk loans. This can result in overfunding for existing customers or funding for new customers with poor credit quality. This will have a long-term impact on the overall credit quality of the bank.
  • Postcode battery: In addition to new loans, existing accounts can also switch to non-performing assets (NPA) due to high unemployment rates and losses suffered by businesses due to low economic activity.
  • Currency devaluation: Measures such as quantitative easing to boost liquidity can lead to currency devaluation. As bond yields decline due to quantitative easing, a devaluation of the currency occurs. It may help the country’s exporters as their products would be cheaper in the world market, but it will make the import products more expensive. This happened during the global financial crisis of 2007-2008 with the USD index, which fell more than 5% after the first round of quantitative easing.
  • Liquidity trap: A liquidity trap is a situation where interest rates are very low but the consumer continues to accumulate money in savings and other accounts and does not wish to invest in any other instrument. This happens when the client anticipates a negative event in the economy and does not want to invest in low yielding bonds, which will result in a loss for him when interest rates in the market rise. A similar situation applies when banks prefer to hold cash rather than lend to customers, as keeping reserves with the central bank gives a higher return.
  • Overheating stock markets: During the pandemic, markets around the world collapsed for the first few weeks, but then hit an all-time high in 4 to 6 months since the start of the pandemic. Many experts claim that this unprecedented run in the stock markets is due to the huge liquidity stimulus injected by central banks around the world. Several experts also cite this as the main reason for the race north of the security markets.
  • Lower net interest margins: The excess liquidity of many banks is placed in low yield accounts. This will have an impact on the banks’ net interest margin (NIM).

There is no doubt that central banks around the world have learned from past crises and provided enough stimulus this time around to keep bank liquidity in a healthy position. However, they should be aware that excess liquidity can cause damage to the overall economy. They must either start absorbing liquidity through tactics such as rate hikes or open market operations at an appropriate time, or continue to push banks to lend using their inflated coffers.

Recently, the situation in a few countries like the United States and the United Kingdom has improved and economic activities are returning to normal. This could indicate that the central banks of some countries will take the necessary steps to suck liquidity from the markets. However, this is unlikely to happen before the first quarter of 2022. Nonetheless, the battle could be longer as financial uncertainty continues to be a major factor in many countries.

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Falling short-term credit weighs on South African economy, study finds Thu, 16 Sep 2021 18:01:33 +0000 Advanced short-term loans are on the decline, according to a study. A decline in the extension of short-term credit has had negative impacts on the economy such as reduced sales, fewer employment opportunities and less tax revenue collected, according to recent research. A …]]> loans are on the decline, according to a study.” height=”682″ width=”1024″ class=”img-lazy”/>

Advanced short-term loans are on the decline, according to a study.

  • A decline in the extension of short-term credit has had negative impacts on the economy such as reduced sales, fewer employment opportunities and less tax revenue collected, according to recent research.
  • A new index points out that the value and number of short-term loans granted is on a downward trend.
  • In addition, a decrease in the number of creditworthy applicants reflects a decrease in employment and a decrease in average real incomes.

A decline in the extension of short-term credit has had negative impacts on the economy, including reduced sales, fewer employment opportunities and less tax revenue collected, according to recent research.

Payment solutions provider Altron Fintech launched its Short-Term Credit Impact Index on Thursday, in partnership with independent economic consultant Keith Lockwood. The index was commissioned to assist credit providers in the short-term market as well as to create a better understanding of the role of credit in the South African economy.

Short-term credit includes loans of less than Rand 8,000 and is repayable within six months.

The index shows that on a year-over-year basis, short-term credit extensions contracted 12.3% in the first quarter of 2021. Short-term credit extensions fell 1.4% from the previous quarter (or the fourth quarter of 2020).

The decline in short-term credit extensions also coincided with lower sales, employment and taxes across the economy. Year over year, sales fell from R790 million to R5.6 billion. Compared to the fourth quarter of 2015, short-term credit extensions contributed nearly R11 billion in revenue.

When it comes to employment opportunities, nearly 1,400 fewer jobs were supported and R96 million less taxes were collected in the first quarter of 2021, compared to the same quarter last year.

“Just as net additions to the extension of credit can generate positive economy-wide economic impacts that are a multiple of the value of the credit granted, the contraction of the net extension of credit generates multiplier effects. negatives throughout the economy. Businesses that received additional sales as a result of credit made available to their customers will experience lower sales, ”Lockwood said.

A drop in sales results in companies using fewer factors of production such as labor and placing lower value orders with suppliers, Lockwood added.

“Credit is an important cog in the engine that fuels economic growth. An increase in credit extension re-injects money that was previously out of circulation into the economy and thereby generates a flow of economic activity and income, ”said Johan Gellatly, Managing Director of Altron Fintech.

Data from the National Credit Regulator shows that at the end of the first quarter of 2021, short-term credit was only 0.1% of the total outstanding of R 2.04 trillion. By comparison, mortgages accounted for just over half, at 51%.

Since 2015, the value of outstanding short-term loans has trended downward from a peak of 3.6 billion rand to less than 1.8 billion rand in the second quarter of 2020, when restrictions of Level 5 lockdowns were in place, according to the report. . The decrease is attributable to lower new credit advances as well as the value of loan repayments and write-offs exceeding that of new advances.

“In the first quarter of 2021, the value of short-term loans repaid or written off was R 27 million more than the value of new advanced short-term loans,” the report said.

In the first quarter of 2021, short-term loans represented 1.4% of advances and mortgage loans 39.1%. However, the share of short-term credit advances was 15 times greater than its share of outstanding debt.

The share of short-term credit advances was 15 times

The share of short-term credit advances was 15 times greater than its share of outstanding debt.

“In the first quarter of 2021, Rand 1.97 billion of short-term credit was advanced via 715,000 loans with an average value of Rand 2,758,” Altron Fintech said in a statement.

Overall, there has been a downward trend in the value and number of short-term loans advanced, the report noted. Where 2.2 million loans were made in the fourth quarter of 2015, that number fell to around 431,000 in the second quarter of 2020. But loans rose to 762,000 in the fourth quarter of 2020, before falling back to a bit. over 715,000 per quarter.

Changes were also made to the conditions of the loans granted. In the first quarter of 2015, one-month loans represented 74% of short-term loan advances. But in the first quarter of 2021, it was around 37%. At the same time, the share of loans granted for a term of four to six months rose from 19% to 50%. Loans with terms of two to three months increased their share of advanced short-term loans from 7% to 13%.

Trends can be explained by declining per capita incomes, declining employment levels, increased competition from other credit providers – mainly for higher value, longer term unsecured loans.

The number of solvent applicants has also decreased. For example, in 2015, just over half (53%) of applicants were rejected. But in the first quarter of 2021, around 62% of applicants were rejected. Around two-thirds of the applicants were rejected in the second quarter of 2020, amid higher foreclosure restrictions. The decline in the number of creditworthy applicants is reflected in the 1.4 million job decline during the pandemic as well as a drop in average real incomes, Lockwood noted.

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Warnings on the rise over unregulated payday loan plans Wed, 15 Sep 2021 06:00:00 +0000

The latest jobs numbers may be a comforting read, but the numbers behind the headlines tell a different financial story.

About 9 million people have had to borrow more money than usual due to the pandemic, according to the Office for National Statistics (ONS).

The government’s leave program, which has protected around 11 million jobs, is also set to end soon, which is expected to lead to higher unemployment figures and see more people going into debt.

If your income has declined or you are short of money, one solution is to use an employer payroll advance plan (ESAS).

They are also known as Access to Earned Wage (EWA) programs and have grown in popularity over the past year or so as workers find themselves unable to wait until the end of the month to get paid.

Often described as “welfare” devices, they allow workers to access their wages earlier. It is not possible to withdraw all the money, and most companies allow people to access 50% of their regular salary earlier, for a small fee.

One of the best-known companies in this field is Wagestream, which charges workers £ 1.75 to receive an advance of up to 50 percent of their salary.

The Revolut financial app has also just launched a new payday advance system. He says it’s an alternative to expensive payday lenders and controversial Buy Now, Pay Later services.

He is in talks with companies to enroll them in the scheme, which will allow workers to withdraw up to half of their wages early with a fee of £ 1.50 per transaction.

However, while programs like these may be less expensive than other short term loan options, they are not without criticism.

First, there is a cost to accessing that money early, which is usually a transaction fee instead of interest charged on the money. Most companies also don’t do a credit check.

Then there is a larger issue of financial management.

On the one hand, they could be a lifeline if someone needs a little extra cash, doesn’t want to use an expensive short-term lender, and can’t wait for their paycheck to come to an end. month.

But are they just the least of the other evils? If that same person is already strapped for cash, they’ll have a hard time budgeting when they get their payday payday and that’s 50% less. This could cause them to either repeatedly withdraw their wages earlier, or opt for more expensive options to help them out.

Rachel Harte, head of financial planning at digital coach Claro, says: “Facilities like this can make it too easy to access instant unsecured credit, thus encouraging unhealthy financial habits.

“Payday advance systems aim to give employees greater ownership of their pay and cash flow, and in some circumstances this can be beneficial. However, if used as an unsecured regular credit facility, it can lead to poor financial health and well-being. “

Payday advance programs are not yet regulated by the Financial Conduct Authority (FCA) and offer no protection under the Financial Services Compensation Scheme (FSCS), which protects up to £ 85,000 of your money if a business goes bankrupt.

A recent review of the FCA unsecured credit market said that these programs may offer low-cost borrowing as an alternative to expensive short-term loans, but said they should be used with tools to encourage better money management and savings habits. .

The CIPD said in response that the programs can be a useful way for workers to deal with unexpected financial emergencies and can help them avoid taking on high-cost credit.

However, he said that they must be offered alongside other measures, including a living wage, a guarantee of sufficient hours to receive a decent income, a fair wage, the opportunity to save for the future, benefits that provide emergency support, the opportunity for career development and financial education.

The alternatives to payday advance plans depend on your overall financial situation.

Using existing savings or your income is still the best way to pay for an unforeseen event, but many people are unable to do so, especially in today’s economic climate.

If you are able to get a credit card with a 0 percent interest period, it will usually be cheaper. However, they are only beneficial if you are able to clear a credit card balance before you start paying interest. The best products are also only reserved for those with excellent credit scores.

Payday loans are the more expensive option and can often push people into trouble with debt, while dipping into an overdraft can also cost a lot of money, in interest or in daily fees.

Using a credit union is a good alternative if you have a bad credit rating and don’t want to go the route of short-term lenders. They should also be able to offer financial advice.

Charities such as Step Change can also provide free, independent help if you are struggling with your finances.

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US government shutdown looming for investors Sat, 11 Sep 2021 04:35:36 +0000

The “debt ceiling” trap is even more pressing for the Biden administration and its supporters of the $ 3.5 trillion social spending program. The same is true for the market.

Due to transactions in July 2019, the debt cap law was suspended until August 1, 2019. Now that the law has taken effect, Democrats and Republicans may underestimate the problems it can. cause.

New US Treasury borrowing will not be allowed unless a new “debt ceiling” law is passed that allows borrowing in excess of the existing roughly $ 28.5 trillion.

This means that at some point the government will have to enter into a partial shutdown, at least without a new debt repayment law and a short-term “rolling fix” for funding.

Without a new program, spending on activities such as flood control, Covid-19 control, withdrawal from Afghanistan and resettlement would reach debt limits. Treasury Secretary Janet Yellen estimates the “X” day the government runs out of cash: October.

Don’t worry about rebuilding a society with better infrastructure and more equity. The government may have to suspend hundreds of thousands of unpaid employees and contractors.

Republican Senate Leader Mitch McConnell formally opposed the government’s tax system on the wealthy and spending on climate, health and social equality, but helped push through the increase in the cap on the debt. Not provided.

It only offers short-term “continuous resolutions” until the actual budget is passed by both houses and the law is signed. McConnell has a vote to prevent raising the debt ceiling if he and his allies are not happy with the tax and spending program.

And finally, he said, after a short and continuous resolution of about a month, social spending and tax allowances to the rich (or carbon) would not be $ 3.5 trillion. Show. They can be half of that, as Conservative Democratic Senator Joe Manchin reported. I have spoken about it personally. This gap between offers and offers comes before a long legislative struggle.

All of this uncertainty can have a devastating impact on markets around the world.

There were clues about the risks and actions the Fed may take Transcript Report of the Federal Open Market Committee conference call October 16, 2013 for central bank policy making.

It was released in January 2019 and, according to people familiar with the matter, urgent “actions” the central bank plans to keep the market open if it goes down. The last published account. Yellen and current Federal Reserve Board Chairman Jay Powell were called in as board members.

According to the transcript, the board was updated with a joint memo detailing nine “actions” under the emergency response plan. The first seven are now standard Fed market tactics, including so-called reverse repurchase transactions, lending Treasury securities to others to use as collateral.

Other actions are listed, but more controversial. Action 8 removes Treasury securities whose payment is or could be delayed by buying them entirely on behalf of the Fed.

Action 9 swaps the obligation of the default client or broker at risk for a bond in the Fed’s portfolio that later has interest or principal payments.

Powell said such actions would be “disgusting” because it meant the Fed would enter a “difficult political world” that seemed to solve the problem. But he said in the extreme that he would not exclude them.

The Federal Reserve Board also requires Treasury approval to extend overdue principal payments at a time, one day at a time, until 10 p.m. daily, until the debt ceiling is reached. be modified.

People in history and in the market tell me that this process is going to “contaminate” the risky Treasury securities when they close. Investors avoid them, and the operator of the clearinghouse for financial instruments at least “haircuts” or haircuts the value of the Treasury as collateral for transactions. It will clog interest rate products and foreign exchange markets.

As a report from the US Government Accountability Office on the details of the 2013 shutdown: “The manager of the world’s largest derivatives exchange said in mid-October that he had demanded that his counterparties do not not use government bonds (as collateral) that require payment of principal or interest. . “

Debt ceiling closures and freezes have the potential to disrupt the collateral market. Sound combat station.

US government shutdown looming for investors Source link US government shutdown looming for investors

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Wall Street ESG loans make U.S. companies pay little for missed targets Wed, 08 Sep 2021 05:06:04 +0000

(Bloomberg) – When American Campus Communities Inc. announced it had signed a $ 1 billion sustainability line of credit in May, its executives decided to take a victory lap.

For the first time, they said, the company was tying its borrowing costs to goals ranging from improving energy efficiency to having a diverse workforce and boards. The largest university apartment owner in the United States even issued a press release touting its commitment to environmental, social and governance goals.

What the statement did not say was that the financial incentives included in the loan were largely meaningless. American Campus Communities did not incur any additional costs for not meeting its ESG goals and would only save a hundredth of a percentage point in interest – barely $ 100 per year for every $ 1 million drawn – if it achieved all of its goals.

And that, it turns out, is hardly the exception in the area of ​​ESG lending.

Bloomberg analysis of over 70 sustainability-linked revolving lines of credit and term loans in the US since 2018 shows more than a quarter contain similar provisions: no penalty for not meeting targets fixed, and only a tiny discount if the goals are met. Other companies that have widely publicized similar deals, including JetBlue Airways Corp. and Prudential Financial Inc., refused to disclose details of their loans.

As U.S. companies grapple with scrutiny of their ESG efforts, companies are increasingly looking to Wall Street to help polish their credentials. Yet critics say more and more companies are presenting overly polite pictures of their commitments and results. The results suggest that while bank lending offers companies one of the easiest routes to access ESG finance, the route is also one of the least ambitious.

“This is simply misleading,” said Peter Schwab, portfolio manager at Impax Asset Management, one of the largest fund managers dedicated to sustainable investments. “There really is no significant financial impact. I don’t know why some companies even care.

American Campus Communities attributed the terms of its deal to the company being a “early adopter” in the sustainability lending market, and said its public comments ensure the company is held accountable to lenders. and to shareholders of its ESG commitments.

“At the end of the day, it’s really lender-driven,” said Ryan Dennison, the company’s senior vice president for capital markets and investor relations, of the price adjustments the company has achieved. . “We could either do nothing or do something and express some of our ESG goals and work on them. “

Sustainability-linked loans should not be confused with the so-called green bonds that have swept global finance in recent years – and which themselves face great skepticism.

For one thing, loans don’t limit what businesses can do with the funds. Instead, lenders agree to tie interest rates to certain ESG measures. Businesses, in theory, should benefit from lower borrowing costs if they meet their goals and face penalties if they do not.

Banks also tend to keep revolving credit facilities on their balance sheets rather than spreading the risk over investors. Businesses can use them as needed, although they often leave them unused for years.

Ridiculous penalties

This is a relatively new form of financing, especially in the United States. About $ 93 billion in sustainability-related loans were valued this year, or seven times the $ 13 billion arranged in 2020. Yet, this is only a fraction of the nearly $ 1.5 trillion in loans. syndicated in the United States since the start of the year, according to data compiled by Bloomberg.

Some industry watchers expect economic incentives to become more aggressive as the market grows. And of course, some companies are using them as part of a wider range of tools to help achieve (and communicate to investors) their environmental and social goals.

But in other cases, sustainability-linked loans have apparently become a way for companies to brag about their ESG good faith while risking the bare minimum, potentially adding to concerns about the so-called greenwashing that has emerged in it. other areas of sustainable finance and has attracted attention. regulators.

Read more: Fund managers feel heat in SEC crackdown on ESG labels

Bloomberg used public documents and information obtained from companies to analyze 77 revolving credit facilities and term loans that included sustainability adjustments.

About 40% of borrowers agreed to pay a five basis point penalty if they didn’t meet their goals in exchange for a five basis point discount if they hit their goals, a total variation of 10 points. basic.

Two borrowers, Millicom International Cellular SA and Diana Shipping Inc., set the adjustments at 10 basis points in both directions.

To find out more about sustainable finance:

SEC Chairman Gensler orders review of funds’ ESG information

On the opposite end of the spectrum, more than a quarter of companies had incentives that amounted to a single base point if they unsheathed their guns, as the American Campus Communities did. When credit lines remain untapped, sustainability adjustments do not apply or amount to a maximum basis point.

“Most of the upward or downward price adjustments are minimal,” said George Serafeim, a Harvard Business School professor who focuses on business performance and social impact, by email. “It seems to me more of a symbolic gesture than a serious effort to price and integrate climate risk into the contract.”

Almost all of the members of this club at some basic point are real estate investment companies, or vehicles that own large real estate portfolios and distribute most of the income they generate as dividends. Among them are multi-billion dollar companies such as Simon Property Group Inc., one of the largest owners of shopping malls in the United States, and Welltower Inc., one of the largest owners of retirement homes. elderly.

Many REITs likely choose such arrangements simply because their peers have done so, said Nathan Cooper, a partner at Hogan Lovells who helps organize sustainability-linked loans.

“This is a formula that already exists and is approved by the banks and poses no downside risk to the REIT,” Cooper said via email. “You see now that companies and banks are a bit more conservative with price adjustments and are wary of the risk of falling prices on a new concept. “

Simon Property Group did not respond to requests for comment, while a representative for Welltower declined to comment.

Read more: Former ESG Insiders Reject Company Green Goals As Toothless Hype

While the financial impact may not be significant for companies, there is a reputational risk if targets are not met, according to Arthur Krebbers, head of sustainable finance at NatWest Markets in London.

“It is too narrow to view these loans solely from the angle of an incentive for direct pricing,” Krebbers said. “What worries them much more is the wider reputation and the impact on the market if they have to reveal that they have not achieved a sustainability goal they set for themselves.”

The bankers’ dilemma

For lenders such as Bank of America Corp., JPMorgan Chase & Co. and BNP Paribas SA, the world’s three largest underwriters, corporate membership is a delicate balancing act.

Some bankers who work in ESG finance have said that if their institutions want to encourage their clients to become better corporate citizens, there is only a portion of their bottom line that they are willing to sacrifice. Lines of credit are often a profitable product that banks offer businesses to build relationships and attract more lucrative businesses down the line.

But therein lies a fundamental dilemma, say observers.

Banks are reluctant to give too large a discount to borrowers who meet the targets because they fear the loans will become too heavy. If the penalties are too high, on the other hand, they risk scaring customers away.

Better incentives can be found in the sustainability bond market, where fund managers with specific mandates to invest in ESG debt typically impose heavier penalties on companies that miss their targets. Penalties for bonds typically vary between 25 basis points and one percentage point depending on the issuer, according to market experts.

Advocates of stricter standards in the industry say another critical issue is ensuring that the goals set by companies are ambitious and force companies to stray from their current path.

American Campus Communities listed three main ESG goals when it closed its revolver four months ago. In addition to energy efficiency improvements, it sought 30% representation of women, racial or ethnic minorities and members of the LGBTQ + community on its board of directors, and targeted 70% for its workforce.

But by the end of 2020, the Austin, Texas-based company had already met both of its diversity goals, according to its annual ESG report.

Impax’s Schwab said ideally companies would commit to significantly improving their metrics and inflicting hefty penalties if they fail to meet them.

“We are extremely supportive of companies that measure and set goals,” he said. “Businesses are starting to get a little more serious, but it’s not enough.

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The Council Advancement Loan Fund for Native Hawaiians Fri, 03 Sep 2021 23:20:01 +0000

The Council for Native Hawaiian Advancement has programs to help community members. We spoke with Mehanaokala Hind, Senior Vice President of Community Programs, about the loan fund.

“As a community development financial institution, we provide financial capital in the form of loans to Native Hawaiians and other underserved communities facing challenges in obtaining credit for their small businesses, construction and repair. homes, and in some cases in the form of bridging loans to other organizations and people in need of short-term funding.
We also wanted to know more about the Community Development Financial Institution.

“A CDFI is a US Treasury certified financial entity designed to meet the credit needs of communities and individuals who do not have access to affordable and reliable capital. Unlike traditional banks, CDFIs offer more flexibility in underwriting practices when seeking loan approvals. We are able to tailor our decisions to circumstances that might otherwise prevent a business or individual from accessing loan capital, such as lower credit scores or limited guarantees. “

For more information, please visit

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Energy Access Relief Fund Raises $ 68 Million to Boost Energy Sector in Africa and Asia Thu, 02 Sep 2021 13:48:13 +0000

(Agence Ecofin) – The Energy Access Relief Fund, recently created by a consortium of investors and development finance institutions, raised a total of $ 68 million for its first closure. The vehicle, managed by Social Investment Managers and Advisors (SIMA), will provide short-term loans to nearly 90 companies active in the energy sector in sub-Saharan Africa and Asia. The EARF targets companies that are still struggling to finance themselves due to the economic crisis linked to Covid-19.

Ultimately, the Fund plans to invest $ 80 million to facilitate access to energy for at least 20 million people in the targeted areas. “Together, CDC, DFC and FMO are mobilizing our capital to ensure the survival of small and medium social enterprises extending access to energy to the 800 million people living without electricity. EARF’s flexible and innovative financial structure combines different types of capital to provide low-interest loans and liquidity as the health and economic consequences of the pandemic continue, ”said Geoff Manley, head of the access and energy efficiency of the CDC group.

SIMA’s analysis of energy companies eligible for short-term financing in 50 countries found that 77% of potential borrowers need emergency financial assistance to stay afloat and avoid taking drastic measures such as suspension of operations.

Chamberline Moko

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Industrial and Commercial Bank of China Limited, MUFG Bank Ltd. – UNLV The Rebel Yell Wed, 01 Sep 2021 07:41:18 +0000

MRI Precision Reports reports provide many Commercial loan assessments taking into account the significance and projections and provide detailed and strategic identification of life choice and effective data to provide a high degree of industrial clarity.

It gives an actual summary of the existing business model which includes authentic assessments of market income and profits, technical advancements, macroeconomic factors, and characteristics of the problem.


The Major Players Covered In The Global Market Report:

Industrial & Commercial Bank of China Limited, MUFG Bank Ltd., Bank of China Limited, China Construction Bank Corporation, JPMorgan Chase Bank National Association, Agricultural Bank of China Limited, Crédit Agricole SA, BNP Paribas SA, China Development Bank, JAPAN POST BANK Co Ltd, Mizuho Bank Ltd, BPCE, Bank of America National Association, Bank of Communications Co Ltd, Deutsche Bank AG, Banco Santander SA, Sumitomo Mitsui Banking Corporation, Citibank NA, Société Générale, Wells Fargo Bank National Association, China Merchants Bank Co Ltd, Postal Savings Bank of China Co Ltd, ING Bank NV, Banque Royale du Canada, UBS AG, The Toronto-Dominion Bank, The Norinchukin Bank, Barclays Bank PLC, Industrial Bank Co Ltd, The Hongkong and Shanghai Banking Corporation Limited

The report analyzes the business environment for commercial lending. Major market players have been identified or reviewed, which helps identify aspects of the business. Overview, subsequent analysis, financial situation, and SWOT are some of the elements discussed in this report by major industry players.

Product types covered in the report include:

Short term loan, medium term loan, long term loan.

The types of applications covered in the report include:

BFSI Industry, Retail Industry, IT and Telecom Industry, Health Industry, Food Industry, Others.

Developments in trade and some other relevant key aspects are already studied at length, including these product lines. It also contains photographs of the well-established brand’s focus and presentations of various goods and services.

To purchase the full report:

This report is divided into several major geographic regions, including

  • North America (United States, Canada and Mexico)
  • Europe (Germany, France, United Kingdom, Russia, Italy and rest of Europe)
  • Asia-Pacific (China, Japan, Korea, India, Southeast Asia and Australia)
  • South America (Brazil, Argentina, Colombia and the rest of South America)
  • Middle East and Africa (Saudi Arabia, United Arab Emirates, Egypt, South Africa and Rest of Middle East and Africa)

In this research, with respect to the overall market for each particular area, growth rates, geopolitical elements, consumer buying patterns, and business lending are also examined.

Customization of the report:

This report can be customized to meet customer requirements. Please connect with our sales team (, who will make sure you get a report that’s right for you. You can also contact our leaders at +1 8045001224, +44 7418413666 to share your research needs.

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Harrison County Sewer Project Blocked By Federal Rules | New Sat, 28 Aug 2021 04:00:00 +0000

CLARKSBURG, Va. (WV News) – A Harrison County wastewater treatment project suspended as sponsors secure new funding deals may already be underway if the county falls under a different section of the law federal government on the development of water resources.

In November 2018, after about 20 years of planning, the West Fork Site Community Cooperative secured funding for 75% of the cost of a septic tank effluent pump sewer system to serve over 300 homes. , three churches and the State Highway Division building to the communities of Arlington, Glen Falls, Gore and Dawmont through the US Army Corps of Engineers.

In May 2019, the co-op secured the 25% match through debt forgiveness and low-interest loans through the West Virginia Infrastructure and Jobs Development Council.

The project would cost $ 7.5 million.

The completed system would not only help clean up serviced communities and the West Fork River by preventing untreated effluent from flowing from homes into waterways, but it would also be cheaper for residents of serviced communities than it would be. connect to a centralized sewage system, according to West Fork Co-op board member Paul Hamrick.

Recently, however, co-op board members learned that the match should be provided in advance, rather than paid for as the job is completed. State funds, however, can only be paid when the work is completed and invoiced, according to Hamrick.

Therefore, the cooperative is now considering short-term private financing options that are expected to add $ 45,000 to $ 50,000 to the overall cost of the project, he said.

The reason is enshrined in federal law.

The Water Resources Development Act is a two-year bill originally passed by Congress in 1986 to fund water resources infrastructure projects.

Sections 340 of the bill, covering the southern counties of the 3rd Congressional District of West Virginia, and Section 571, covering the central counties of the 2nd Congressional District of West Virginia, were created in bills of Reauthorization Acts passed in 1992 and 1999, respectively, to authorize resources for environmental infrastructure in these parts of the state through the Army Corps of Engineers.

The chapters are specific to these districts as they were created at the request of the US representatives of each district at the time. For example, Senator Shelley Moore Capito, then House Representative for the 3rd Congressional District of West Virginia, served on the House Transportation and Infrastructure Committee and secured Section 571 of the Reauthorization Bill. .

West Virginia’s 1st Congressional District was not included until 2007, when it was one of some 300 regional sub-authorizations included in Section 219.

Although section 219 provides resources for environmental infrastructure, it is not structured the same way as other sections, such as sections 340 and 571.

According to James Shibata, chief of the project management section of the US Army Corps of Engineers, the majority of environmental infrastructure programs under the Water Resources Development Act allow project developers to retain services. from an engineering company to design and subcontract construction, with the Army Corps of Engineers providing oversight to ensure the project meets federal funding requirements.

Rather than paying the grant money up front to the sponsor, the sponsor pays the contractor and is then reimbursed by the Army Corps of Engineers up to 75% of the cost of the project.

Under Section 219, however, instead of the sponsor getting an engineering company, the Corps of Engineers is responsible for advertising for the engineering company or contractor and must pay the contractor to the advance.

“It appears that the intention of Congress, at the time of enactment, was not to create more work for USACE engineers, but to provide opportunities for local engineering firms and construction contractors. Therefore, USACE is not authorized to terminate projects. USACE must advertise the engineering company or construction contractor and is required by law to fully fund a contract at time of award. USACE only receives 75% of the funds, which are earmarked by Congress, and therefore needs the 25% funding from the sponsor to comply with the law and award the contract, ”said Shibata.

Now, West Fork Co-op members are looking for 25% match funding options.

According to Hamrick, Harrison County officials informed him that the county did not have the $ 793,000 in its coffers to offer an initial loan on the first phase of the project, to be repaid with state funds as it progresses. and as the project progresses. A county official also indicated that American Rescue Plan Act funds cannot be used as a match for other federal funds.

A spokesperson for Sen. Joe Manchin, DW.Va., did not address the Wastewater Development Resource Act, but said the senator supports the West Fork Co-op project.

“Senator Manchin has worked with the West Fork Co-op on this project over the past year and is proud to support their efforts to bring safe, clean water to more West Virginia people. Earlier this year, with the support of Senator Manchin, the West Fork Co-op was granted a waiver to serve as a non-federal sponsor for the project. Senator Manchin also drafted the provision of the US bailout that allowed all state and local fiscal adjustment funds, including $ 1.3 billion for the state of West Virginia and $ 13.4 million for Harrison County, to be eligible for water and sanitation infrastructure projects. His office continues to work with local, state and federal stakeholders to move this project forward, ”the spokesperson said.

A spokesperson for Capito, RW.Va., said the senator has worked to secure funding for infrastructure in the state through the three applicable sections of the Water Resources Development Act.

“As a leading member of the [Environment and Public Works] Committee, Senator Capito will continue to prioritize environmental infrastructure resources for our state in the next WRDA bill to be submitted to the Senate next year, ”the spokesperson wrote.

Meanwhile, West Fork Co-op board members approached two private banks with the goal of securing a short-term loan to pay the initial cost. First, however, the co-op will need to apply for additional funds from the West Virginia Infrastructure and Jobs Development Council to cover the additional financing costs associated with any loan the co-op may receive, Hamrick said.

That board then meets on September 1, but the co-op members couldn’t meet the deadline to get on the agenda, according to Hamrick.

This has been a frustrating setback for the members of the co-ops.

“We’re upset in some ways because we still don’t understand why Section 219 requires this due diligence that wouldn’t be necessary if we were in Jane Lew or in Logan County,” Hamrick said.

It was also frustrating for residents of the four communities that would be served, some of whom repaired individual septic systems with temporary dressings pending a solution to their community’s sewer problems, he said.

Editor-in-Chief JoAnn Snoderly can be reached at 304-626-1445, by email at or on Twitter at @JoAnnSnoderly.

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