NaBFID, World Bank and ADB Plan $1 Billion Credit Facility
Why in the news
NaBFID is teaming up with the World Bank and ADB on a facility that shares credit risk on infrastructure lending.
Key facts
- Products: credit enhancement such as partial credit guarantees.
- Helps firms rated BBB to A improve credit profile, cut borrowing cost and tap the bond market.
- Multilateral backing lets NaBFID guarantee beyond RBI’s AIF caps.
| AIF cap on a ₹1,000 crore scheme | Maximum |
|---|---|
| All RBI-regulated entities (20%) | ₹200 crore |
| Single bank or NBFC (10%) | ₹100 crore |
Significance
- Insurance and pension funds put only 6% of portfolios into infrastructure.
Exam angle
- Partners: World Bank and ADB.