Borrow money – Agapes GR http://agapesgr.org/ Wed, 23 Nov 2022 02:43:12 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://agapesgr.org/wp-content/uploads/2021/06/icon-2021-06-25T194407.031-150x150.png Borrow money – Agapes GR http://agapesgr.org/ 32 32 Bankman-Fried makes his mea culpa in a letter to former FTX employees https://agapesgr.org/bankman-fried-makes-his-mea-culpa-in-a-letter-to-former-ftx-employees/ Wed, 23 Nov 2022 00:03:23 +0000 https://agapesgr.org/bankman-fried-makes-his-mea-culpa-in-a-letter-to-former-ftx-employees/ Sam Bankman-Fried told former FTX employees that excessive borrowing by his own trading firm Alameda Research was responsible for FTX’s demise, insisting he was unaware of margin positions taken by traders. In a letter to former employees, the FTX The founder wrote that he “did not realize the full extent of the margin position, nor […]]]>

Sam Bankman-Fried told former FTX employees that excessive borrowing by his own trading firm Alameda Research was responsible for FTX’s demise, insisting he was unaware of margin positions taken by traders.

In a letter to former employees, the FTX The founder wrote that he “did not realize the full extent of the margin position, nor did I realize the magnitude of the risk posed by a hyper-correlated crash.”

FTX generally allowed customers to borrow money in order to increase their bets on cryptocurrencies. But this practice allowed Alameda to take extra wide positions, which Bankman Fried claimed he hadn’t been watching.

According to the letter, seen by the Financial Times, Alameda entered the crypto crash this spring after borrowing $2 billion from FTX, which was backed by what it claimed was $60 billion in collateral. But by the time Bankman-Fried’s cryptocurrency empire crumbled, that borrowing had grown to $8 billion and was backed by assets valued at just $9 billion.

“I deeply regret my oversight failure. . . I lost track of the most important things in the hustle and bustle of corporate growth,” Bankman-Fried wrote.

Letter sent to employees of his companies gives Bankman-Fried’s most detailed account to date of how FTX plummeted from one of the best-known names in digital assets to bankruptcy in less than two weeks .

Earlier Tuesday, attorneys for new FTX executives lambasted Bankman-Fried management of the crypto conglomerate, telling a US bankruptcy court in Delaware that the former billionaire ran his business like a “personal fiefdom” and that the group spent “substantial sums” on items unrelated to the business, such as vacation homes in the Bahamas. Previous bankruptcy filings have highlighted “misuse of customer funds”.

Bankman-Fried said the crash in token prices and the “drying up” of credit in digital asset markets after the collapse of stablecoin Terra this spring eroded Alameda’s guarantee from about $60 billion to $25 billion.

The position deteriorated sharply in November due to a “hyper-correlated crash”. . . over a very short period of time,” an apparent allusion to the price crash of FTX’s own FTT crypto token earlier this month after CoinDesk, a news service that covers digital currencies, revealed the pivotal role that he was playing on the Alameda balance sheet. Rival crypto exchange Binance responded to the report by announcing its intention to sell its coin stock.

The scale of the problem was amplified as Alameda held $8 billion in client funds owned by FTX. Bankman-Fried claimed that Alameda held these funds from FTX clients because it received money from them before the exchange had its own bank account. Several FTX clients told the FT that they wired money to Alameda which was then to be used on the exchange.

“As we frantically put everything together, it became clear that the position was bigger than its display on admins/users, because of the old [cash] deposits before FTX had bank accounts,” Bankman-Fried said.

Alameda’s assets included large investments in venture capital and crypto tokens that could not be quickly turned into cash.

Bankman-Fried said he regretted putting the entire crypto group into Chapter 11 bankruptcy, “even solvent entities,” and apologized to customers and his former staff.

“You were my family,” he wrote. “I lost that, and our old house is an empty warehouse of monitors. When I turn around, there’s no one to talk to.

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Report – NBC Bay Area https://agapesgr.org/report-nbc-bay-area/ Thu, 17 Nov 2022 17:54:25 +0000 https://agapesgr.org/report-nbc-bay-area/ California will likely run a $25 billion budget deficit next year, state officials said Wednesday, ending a streak of historic surpluses and acting as a warning to other states of a possible recession. Democratic-controlled California taxes the wealthy more than other states, meaning most of its drop in income is because the wealthiest aren’t making […]]]>

California will likely run a $25 billion budget deficit next year, state officials said Wednesday, ending a streak of historic surpluses and acting as a warning to other states of a possible recession.

Democratic-controlled California taxes the wealthy more than other states, meaning most of its drop in income is because the wealthiest aren’t making as much money as they used to. This is why California is often one of the first states to have budget problems when the economy begins to falter.

The S&P 500, a key indicator of the health of the stock market that drives the incomes of the super-rich, has fallen more than 17% since its peak in January. State revenues are now $41 billion below expectations, according to an outlook released Wednesday by the Office of the Nonpartisan Legislative Analyst. The estimated deficit is lower because some of these revenue losses have been offset by lower spending in other parts of the budget.

The shortfall won’t jeopardize some of California’s major government service expansions, including free kindergarten for 4-year-olds and free health care for low-income immigrants living in the country without legal permission.

But it will force painful spending decisions, Democratic Gov. Gavin Newsom’s administration said.

“While we’re actually better prepared, that doesn’t mean decisions to close the fiscal gap ahead won’t be difficult, particularly if the economic conditions that have slowed the economy continue or worsen,” the California department said. Finance spokesman HD Palmer said.

Despite the bleak outlook, California is better positioned to weather an economic downturn than it has been in the past. The state has $37.2 billion stored in its various savings accounts. And it has plenty of cash available to meet its obligations this year.

“It’s not negligible, but it’s also manageable,” legislative analyst Gabriel Petek said of the deficit. “We don’t see this as a fiscal crisis.”

California earnings are notorious for volatility, rising and falling quickly with the vagaries of the stock market. Just two years ago, state officials projected a $54 billion shortfall from the pandemic — a shortfall that never happened as the economy remained strong.

But this latest deficit forecast is more likely to hold. Rampant inflation has made everything more expensive. The Federal Reserve tried to contain inflation by raising a key rate. A higher interest rate makes it more expensive to borrow money, which ultimately makes people spend less. Although this would control price increases, it would also reduce the demand for goods and services. This leads to layoffs, which means people pay less tax.

“The odds that the Federal Reserve can bring inflation under control without causing a recession are slim,” the AJO said in its report.

Although California’s employment remains strong — the unemployment rate of 3.9% for September is the lowest since 1976 — the high-wage tech industry has been rocked by a series of recent job cuts. Facebook’s parent company, Meta, announced last week that it would lay off 11,000 people, or 13% of its workforce.

The report came as no surprise to Republicans, who said they had been warning about California’s massive increase in public spending for years, with Republican Assemblyman Vince Fong calling it ‘unsustainable’. .

“Today’s report is another wake-up call to these warnings. We need to refocus on fiscal responsibility,” said Fong, deputy chairman of the Assembly Budget Committee.

Nor was Democratic Gov. Gavin Newsom’s administration surprised, calling the $25 billion deficit estimate “realistic and reasonable.”

“The good news is that as we prepare to close a budget deficit, the state is in its best position to handle a downturn, having built up strong reserves and focusing on one-time commitments,” Palmer said. , from the Ministry of Finance. spokesperson.

California lawmakers could potentially cover the entire deficit with money he has in his savings accounts, but the Office of the Legislative Analyst has warned them not to. Their outlook projects deficits not just for this year, but for the next three years – although the size of the deficit is shrinking each year.

Instead, the Office of the Legislative Analyst said lawmakers should delay some of the $75 billion in one-time spending they approved over the past two years. As an example, they cited a $500 million program to clean up homeless encampments across the state.

“It’s a really good example of the kind of break we had in mind,” Petek said.

Palmer said the Newsom administration would begin making budget decisions next month. A change in statewide homelessness funding seems unlikely, given Newsom’s commitment to addressing the issue. Newsom suspended $1 billion in homelessness spending earlier this month, but the move was unrelated to falling revenue.

Toni Atkins, acting Democratic president of the California Senate, said she was confident the state could pass a budget this year “without continued cuts to schools and other basic programs or taxing middle-class families.” .

Democratic House Speaker Anthony Rendon said lawmakers “can and will protect the progress of budgets over the past few years.”

“In particular, the Assembly will protect historic funding gains for California schools, as districts must continue to invest in staff retention and recruitment to help children thrive and recover from the pandemic,” said Surrender.

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How to build credit without a credit card https://agapesgr.org/how-to-build-credit-without-a-credit-card/ Mon, 14 Nov 2022 17:49:00 +0000 https://agapesgr.org/how-to-build-credit-without-a-credit-card/ Creditworthiness is something every financial institution considers before lending someone money. A credit report which shows that using credit responsibly can make borrowing money to buy a house or car more affordable through lower interest rates. It can also be assessed by employers when you apply for a job, landlords when you want to rent […]]]>

Creditworthiness is something every financial institution considers before lending someone money.

A credit report which shows that using credit responsibly can make borrowing money to buy a house or car more affordable through lower interest rates. It can also be assessed by employers when you apply for a job, landlords when you want to rent an apartment and car insurers when they set your rates.

“We use credit every day,” says Jeanne Kelly, New York-based credit coach and founder of The Kelly Group. But everyone starts with a clean slate, and building credit can take time.

What credit score do you start with?

Credit scores are three-digit numbers created from information in your credit report, including payment history and the amount of debt you have. The score tells lenders how likely you are to repay what you borrow.

To have a score, your credit report must show one or more accounts that are at least six months old and at least one account that has been reported to one of the three credit bureaus—Equifax, Experianor TransUnion—within the past six months.

Credit scores range from 300 to 850. A lower score indicates that there is a greater risk of not paying your bills, based on your history. “Without good credit, you can get a high interest rate, or worse, you may not even qualify for the loan,” says Lyle Solomon, senior counsel at Oak View Legal Groupa Californian company specializing in consumer credit.

A good credit score, according to the Fair Isaac Corporation (FICO) scoring model, is 670 or higher. Another scoring model used by financial institutions is VantageScore, which considers 661 or more to be a good score.

6 Ways to Build Your Credit Without a Credit Card

Opening of a credit card, making purchases and paying off your balance each month is a common way to build up credit from scratch. But this is not the only way.

In fact, 10% of your FICO score is based on your “credit mix,” or the types of loans or lines of credit you have. When you’re just starting out with little to no payment history, your credit mix matters even more. according to MyFICO.com.

Here are six alternatives to opening a credit card to build credit.

1. Credit-generating loan

A credit loan essentially lets you lend money to yourself, Kelly explains. This is an installment loan with fixed monthly payments, but instead of giving you the money up front, the lender deposits it in a savings account or certificate of deposit (CD).

Some banks withhold access to the account until you repay the loan in full, while others will release funds monthly if you make payments on time. “The good thing about it is you show a payment history, and the money will come back to you, and that’s why it’s a loan for yourself,” Kelly explains.

However, these loans often charge interest and origination fees, so make sure you understand the total costs before getting one.

2. Personal loans

Personal loans, which can be secured or unsecured, allow you to borrow a large or small amount of money to use for anything. You repay the loan in fixed installments over several years. The lender reports the balance and your current payment activity to the credit bureaus.

With a low or no credit score, it can be difficult to qualify for a personal loan at a competitive interest rate. Asking a trusted friend or relative with good credit to co-sign the loan could help you get approved and may lead to a better interest rate.

However, warns Kelly, the co-signer should be prepared to step in if you can’t make a payment on time, because a late or missing payment also affects their credit.

3. Car loan

A car loan is money you borrow from a car dealership or third-party lender to buy a car. Usually this requires a cash deposit, although this is not always the case. And without a credit history, you might want to add a co-signer to qualify for a better interest rate.

Payments are part interest and part principal, and due on the same day each month until the balance is paid off. If you miss a payment, the lender may be able to repossess your car. It is similar to a mortgage in this way, since the loan is secured by a physical asset. As with other loans, the lender is responsible for reporting your car loan payments to the credit bureaus. An on-time payment history will boost your credit score.

4. CD loan

A CD is like a savings account, except your money is locked in for one to five years. The trade-off is that you can earn more interest than you would by keeping your money in a traditional savings account. You can always withdraw your money earlier, but you will have to pay a penalty.

A CD loan involves taking out a loan and using the CD as collateral. This means that you receive a lump sum of cash and then pay back what you borrowed, plus interest, to the bank each month. If you miss payments, the bank may take your CD and may even charge a penalty, Solomon says. “Using a CD-secured personal loan to improve your credit score will only work if you make payments in full and on time,” he adds.

5. Federal Student Loan

The U.S. government lends students money to pay for undergraduate and graduate degrees and professional certification programs — and you don’t need a credit history to qualify.

Unlike private student loans, there is no credit check to obtain most federal student loans. Instead, eligibility is based on citizenship, registration, and in some cases financial need, so it can be a good way to start building credit early.

On-time payments will increase your credit score, while late or missed payments will have a negative impact. “Student loans can also help improve your credit score by increasing your average account age and diversifying your credit mix,” Solomon says.

Some student loans only go into repayment after the borrower has left school, which is called forbearance. Even if you are not actively making payments while forbearing, the loan will still appear on your credit report as being in good standing.

6. Peer-to-peer lending

Peer-to-peer (P2P) lending platforms help you borrow money from individuals rather than a bank or credit union. Investors lend money and profit from the interest you pay on the loan.

“Generally, P2P lenders look for scores ranging from fair to excellent, i.e. 580 or higher,” Solomon says, so you’ll need a credit history to qualify. “Because the whole process is online and streamlined, you can get a loan in just days if you qualify,” he adds.

Another benefit is that P2P lenders only do a soft inquiry to check your credit report, Solomon says. Traditional lenders usually do a thorough investigation that could affect your credit score.

A disadvantage of using P2P platforms is that they can send your account to collections faster than a traditional lender if you miss a payment.

Other options

If you’re looking to potentially speed up the process of building credit or are worried about borrowing money just yet, here are some additional strategies to increase your score.

  • Piggybacking on someone else’s good credit: Many credit card companies allow cardholders to add authorized users to their accounts. As an authorized user, you may obtain a card to use for purchases, but the primary account holder is ultimately responsible for payments. The potential benefit to you, assuming the primary account holder is a responsible borrower, is that their credit account will show up on your credit report, along with payment activity. But not all lenders report authorized users to the credit bureaus, Kelly says, so make sure that’s an option before you tangle with another borrower.
  • Report rent and utility payments to offices: The three major credit bureaus do not require landlords and property managers to report rental or utility payment activity, but they will welcome information when submitted. If you pay your rent and utility bills on time, consider asking your landlord if they can report your payments to the credit bureaus or do it yourself. There are several online services (many are free, but some charge a one-time or monthly fee) that you can sign up for. Some of them will even report the last two years of positive payment history.
  • Report recurring bills to offices: Reporting recurring payments, such as streaming subscriptions and mobile phone plans, is another way to prove your reliability. bill payment. Various online services, including one offered directly by the Experian credit bureau, allow you to connect the bank accounts you use to pay your recurring bills, then report those with a positive payment history to some or all three credit bureaus .
  • Pay your bills on time: The most important factor when it comes to establishing good credit is debt payment history, which makes up 35% of your FICO score. Making full and timely payments on every loan or line of credit is imperative to maintaining strong credit.

The take-out sale

The best way to build credit is to borrow money and pay it back on time. You can do this through credit cards or installment loans, although it can be difficult to qualify for either if you don’t have a credit history to back it up. . The solution can start with options that don’t require a credit check, like federal student loans or credit loans, or options that ask for collateral in exchange for a lower interest rate, like CD loans. .

You can also sign up for a service that reports non-debt bills that you regularly pay on time, such as monthly fees or rent, to the credit bureaus. “These are things that can work so quickly [as loans] and they’re inexpensive,” Kelly says. “These are building blocks.”

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A money lender shot dead by a man who borrowed 40,000 rupees. CCTV led to arrest https://agapesgr.org/a-money-lender-shot-dead-by-a-man-who-borrowed-40000-rupees-cctv-led-to-arrest/ Fri, 11 Nov 2022 17:34:35 +0000 https://agapesgr.org/a-money-lender-shot-dead-by-a-man-who-borrowed-40000-rupees-cctv-led-to-arrest/ After analyzing CCTV footage, police identified Jain. New Delhi: A 43-year-old man was reportedly shot dead in the GTB enclave of northeast Delhi on Friday, police said. The accused, identified as Gagan Jain, was apprehended later that day. He had taken out a loan of Rs 40,000 from Harish Bhati, 43, the victim. Bhati allegedly […]]]>

After analyzing CCTV footage, police identified Jain.

New Delhi:

A 43-year-old man was reportedly shot dead in the GTB enclave of northeast Delhi on Friday, police said.

The accused, identified as Gagan Jain, was apprehended later that day. He had taken out a loan of Rs 40,000 from Harish Bhati, 43, the victim. Bhati allegedly beat and abused Jain, police said.

Around 9:45 a.m., police received information about the shooting at Janta Flats. When they arrived at the scene, they found an injured Bhati and rushed him to GTB Hospital where he was pronounced dead, a senior officer said.

During the investigation, it was discovered that Bhati worked in the financial sector and used to lend money. He had more than 10 cases to his name, police said.

After analyzing CCTV footage, police identified Jain, who also lived in Janta Flats. He was involved in four cases earlier, Deputy Commissioner of Police (Shahdara) R Sathiyasundaram said.

Several teams were formed and Jain was apprehended, Sathiyasundaram said.

During his interrogation, Jain said that he had taken a loan of 40,000 rupees from Bhati and paid him 4,000 rupees in interest every month, Mr Sathiyasundaram said.

Despite this, whenever he got drunk, Bhati would misbehave with the accused and repeatedly slapped him in addition to abusing him, police said.

He also made indecent remarks about Jain’s wife. Two days ago, Bhati beat the accused and publicly insulted him. Fed up with her behavior, Jain decided to eliminate her, they said.

Jain was aware of Bhati’s schedule. When the victim came out of the park after a morning walk, he shot her and fled. Efforts are underway to recover the murder weapon, police added.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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Asian stocks mixed as market awaits voting results and price data https://agapesgr.org/asian-stocks-mixed-as-market-awaits-voting-results-and-price-data/ Wed, 09 Nov 2022 07:13:29 +0000 https://agapesgr.org/asian-stocks-mixed-as-market-awaits-voting-results-and-price-data/ BANGKOK (AP) — Asian stocks were mixed on Wednesday as investors awaited the outcome of the U.S. midterm election and a major inflation update expected later in the week. US futures fell slightly and oil prices fell. Tokyo’s Nikkei 225 index fell 0.6% to 27,716.43 after the Cabinet on Tuesday approved a supplementary budget of […]]]>

BANGKOK (AP) — Asian stocks were mixed on Wednesday as investors awaited the outcome of the U.S. midterm election and a major inflation update expected later in the week.

US futures fell slightly and oil prices fell.

Tokyo’s Nikkei 225 index fell 0.6% to 27,716.43 after the Cabinet on Tuesday approved a supplementary budget of 29.1 trillion yen ($190 billion) to fund the economic stimulus planned for the third largest economy in the world.

Chinese markets fell after the government announced consumer price inflation eased to 2.1% in October from 2.8% in September. Producer price inflation (PPI) fell into deflationary territory, falling to minus 1.3% from 0.9% in October, the 21st month in a row, an even stronger sign that the No. 2 economy is slowing.

“China’s inflation data painted a rather bleak picture, with PPI remaining deflationary and CPI much weaker than expected, indicating weaker demand,” Stephen Innes of SPI Asset Management said in a comment.

Hong Kong’s Hang Seng fell 1.5% to 16,307.72 and the Shanghai Composite Index lost 0.4% to 3,052.48.

In Seoul, the Kospi gained 0.8% to 2,418.70 while Australia’s S&P/ASX 200 rose 0.6% to 6,999.30.

All eyes were on the election, which could determine what is done in the next few years in Washington, and perhaps beyond.

Americans were voting at a time of high inflation and recession warnings and analysts say investors seemed to be betting Republicans would take control of at least one chamber of Congress. That, combined with a Democratic White House, could hamper progress on legislation and increase the risk of a funding crisis for the federal government.

On Wall Street, the S&P 500 rose 0.6% on Tuesday to 3,828.11, while the Dow Jones Industrial Average climbed 1% to 33,160.83 and the Nasdaq composite gained 0.5%, to 10,616.20.

If Republicans do eventually take control of at least the House of Representatives, the ensuing reaction in financial markets could be modest since stocks have already rallied in anticipation of such a move. A surprise victory for the Democrats could upset the market if investors expect higher corporate taxes and other policy changes.

But a Republican victory could also mean less help from Congress in a possible recession than under a Democratic-controlled Congress. And economists predict a slowdown in the coming months as interest rate hikes aimed at tackling inflation dampen business activity and spending.

The big milestone for markets this week as US election day could be Thursday’s inflation report, which will affect the rapid interest rate hikes the Federal Reserve is applying to keep inflation under control.

By raising rates, the Fed intentionally slows down the economy by making it more expensive to borrow money. High rates also tend to depress the prices of stocks and other investments while increasing the risk of recession.

The Fed has already raised its overnight rate to a range of 3.75% to 4%, from virtually zero in March, and more investors expect it to rise above 5% next year. .

A weaker-than-expected reading on Thursday could give the Fed some leeway to relax a bit. Economists expect the report to show a continued slight moderation from a peak reached over the summer. But a worse-than-expected reading could have the opposite effect.

They fell with crypto prices after the world’s largest crypto exchange by daily volume, Binance, said it intended to buy one of its biggest rivals, FTX.

Binance is making the purchase to help FTX deal with a crisis where users withdrew money amid fears over its financial strength. It was the latest crisis of confidence to hit the crypto industry this year, as prices fell in part due to concerns about rising interest rates.

Bitcoin at one point dipped below $17,500 before recovering to $18,267, down 12.2% from the previous day, according to CoinDesk.

In other trading on Wednesday, the benchmark U.S. crude fell 33 cents to $88.59 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international price standard, fell 25 cents to $95.11 a barrel in London.

The dollar slipped to 145.82 Japanese yen from 145.65 yen. The euro fell to $1.0062 from $1.0076.

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Co-lending potential for unserved/underserved segments https://agapesgr.org/co-lending-potential-for-unserved-underserved-segments/ Sun, 06 Nov 2022 17:35:10 +0000 https://agapesgr.org/co-lending-potential-for-unserved-underserved-segments/ Co-lending is a mechanism designed by the RBI to ensure that low-cost funds from banks are made available to NBFCs that operate in deeper geographies and work in MSMEs (Micro, Small and Medium Enterprises), SAPs (economically weaker sections), LIG ​​(low income group) and MIG (middle income group) categories, where banks are slightly reluctant to lend […]]]>

Co-lending is a mechanism designed by the RBI to ensure that low-cost funds from banks are made available to NBFCs that operate in deeper geographies and work in MSMEs (Micro, Small and Medium Enterprises), SAPs (economically weaker sections), LIG ​​(low income group) and MIG (middle income group) categories, where banks are slightly reluctant to lend due to higher operating costs and credit risks.

The main purpose of co-lending is to improve the flow of credit to unserved and underserved segments of the economy. The co-lending model allows NBFCs to seek low-cost funding from banks through a participation agreement, and requires them to provide the remaining 20% ​​from their own funding sources.

This 80:20 ratio ensures that the NBFC does not create bad quality loans, as its 20% stake would also be affected by the losses that would arise from such creation.

This mechanism ensures a win-win situation for all three parties – borrower, bank and NBFC. Borrowers obtain the funds at a lower cost than they would have obtained on a stand-alone basis from NBFC. The bank would get a better deployment of its funds to the unserved and underserved sector, and NBFC would have a steady stream of economical and reliable sources of funding.

If the model is so good, what is hindering its growth?

Model complexity: The model requires banks to publish their credit policy to accept such loans. In addition, banks and NBFC must enter into a framework agreement regarding loan servicing and customer service. There is also a complex accounting methodology that must be in place for the three components of the co-loan – 80%, 20% and 100%. Separate accounts should be maintained for the bank, NBFC and the borrower.

Supply-demand mismatch in the PSL segment (loans to priority sectors): Banks are normally short of RBI’s PSL mandate, and they depend on NBFCs to sell their loans to them (since NBFCs have no such mandate). The supply of PSL loans by NBFCs is much lower than their demand, which makes the commercial negotiation between banks and NBFC very unbalanced in favor of NBFCs.

NBFCs also retain most other income in the form of processing fees, insurance commissions, additional interest rates, NSF check fees, penalty interest.

Curious case of the combined cost of the fund and the borrower’s interest rate: NBFCs say they do not know whether banks would approve a particular loan issued by them for a co-loan when banks select the pool and therefore cannot pass on the benefit of the blended cost to the borrower at the time of granting.

This is a big concern because this uncertainty ends up defeating the purpose of the co-loan at a lower interest rate as envisioned by the regulator.

The NBFC customer segment does not overlap with the bank: The credit profiles of NBFC customers are relatively riskier and therefore the likelihood of higher credit loss cannot be ruled out. Banks also complain that their ability to absorb higher credit losses is very limited. Banks have very little understanding of the credit risk of NBFC borrowers.

Regulatory compliances are different for banks and NBFCs: The regulatory standards for banks and NBFCs are different, so there are issues around know-your-customer (KYC) standards, collateral standards. Do these issues make the co-lending model unviable? Well, the benefits of the model far outweigh the concerns on both sides. There are solutions that will emerge from these challenges that will hopefully make this model a great success.

Some IT and fintech companies have already come up with the accounting and escrow solution for NBFCs and banks. The mismatch between supply and demand will resolve itself over time. Unless co-lending takes off, the supply (of PSL loans) will not improve as NBFCs find it very difficult to raise funds for loans. Unless NBFCs grow in scale and prove their ability to manage credit and liquidity risk well, the NBFC scale problem will not be solved.

Co-lending offers a perfect opportunity to take care of the initial concerns of low cost funds for loans. As the co-lending model develops, competition between NBFCs will ensure that the mixed cost is passed on to the end customer.

As for banks not understanding the credit nuance of this segment, this will be resolved over time as banks gain experience in managing these acquired portfolios and are able to see the performance of these segments over time. There are guarantee companies in the area of ​​MSMEs and home loans in India which can be operated by banks while defining their risk appetite for co-lending activities with NBFCs, and also taking a guarantee of credit default until they are ready to take that risk on their own.

The terms between the banks and the NBFCs, as both begin to see the benefits, will eventually be settled despite the supply and demand mismatch in the PSL sector.

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Harnessing Owners’ Equity for Energy Efficiency https://agapesgr.org/harnessing-owners-equity-for-energy-efficiency/ Thu, 03 Nov 2022 09:47:46 +0000 https://agapesgr.org/harnessing-owners-equity-for-energy-efficiency/ The EU has a renovation problem. To achieve its net zero emissions goals, it must dramatically increase the energy efficiency of tens of millions of homes over the next few decades. This will require an investment of almost 1 billion euros ($976.99 billion), a doubling of the current renovation rate of 1% each year and […]]]>

The EU has a renovation problem. To achieve its net zero emissions goals, it must dramatically increase the energy efficiency of tens of millions of homes over the next few decades. This will require an investment of almost 1 billion euros ($976.99 billion), a doubling of the current renovation rate of 1% each year and a 10-fold increase in the rate of deep renovations.

There are many reasons why it’s proving difficult to persuade homeowners to invest in improving their home’s energy efficiency, but, as with so many things, it all comes down to money.

Sandrine Rousseau, deputy of the Ecologist Party EELV, attends a rally and sit-in in Paris by the environmental group Last Renovation to draw attention to the environmental problems linked to the renovation of housing and buildings, on November 2, 2022. (Photo by Bertrand Guay/AFP via Getty Images)

“People aren’t crazy,” says Peter Sweatman, CEO of Climate Strategy & Partners, a Madrid-based consultancy specializing in energy efficiency. “When they are offered a loan at 7-10% [interest] for a deep retrofit, and they’re looking at the energy savings they can get…the numbers just don’t add up.

Homeowners, he argues, “need access to extremely low and attractive financing to save large amounts of energy.”

Climate Strategy, with funding from the European Climate Foundation, has developed a new financial instrument, the EU Renovation Loan (ERL), which could provide this access. The idea is to tap into trillions of euros of equity locked up in the EU residential housing stock.

In other words, with the support of EU policymakers and the European Central Bank (ECB), the deep renovation market could be boosted – creating jobs, helping to green the financial sector and significantly reducing energy use, consumer bills and carbon emissions on the path to net zero emissions.

The €900 billion challenge

According to a study by Climate Strategy, around 50 million homes in the EU could benefit from deep renovation to significantly improve their energy efficiency. The EU renovation wave strategy proposed by the European Commission in 2020 aims to renovate 35 million buildings by 2030 – an effort that would require an investment of 900 billion euros.

As Sweatman argues, this financing can be found in equity stored in residential properties. European residential buildings are valued at €17 billion, against which €7 billion in mortgages are outstanding, leaving €10 billion of building capital from which owners can borrow to finance renovations in depth.

However, existing financing products are unattractive to many homeowners for a number of reasons. The first is cost, Sweatman says, since they’re often short-term (around seven years) and carry high interest rates. The second is that, for many new homeowners, an additional mortgage would exceed the income multiples that lenders are willing to lend.

The proposed ERL would be for a long term of 30 years and have a zero coupon structure, meaning the borrower would make no cash interest payments over the life of the loan. Instead, the loan principal and interest would be repaid together at maturity. They would charge interest at EU borrowing costs over 30 years, currently 2.2%. As a rough guide, a $20,000 loan would be paid off in $38,400 at maturity in 30 years, Sweatman says.

The benefit for the owner would be immediate energy savings, as well as a “green premium” on the value of the property. EU studies Joint Research Center and the Energy Efficiency Financial Institutions Group set that premium at between 3 and 8 percent, Sweatman says. This premium would in principle cover the repayment of the loan when the home is sold.

ERL’s low interest rate is critical, he adds. “The premise of ERL is that it can provide really attractive financing to help save energy [without homeowners needing to dip into their savings],” he explains.

EU renovation loan needs collateral and cash

Obtaining the low rate depends on two elements. The first is an EU guarantee against non-repayment of loans when due, removing the need for lenders (retail banks) to charge for credit risk. A model exists for such a guarantee in the InvestEU program, which, among other things, guarantees financial institutions to lend to support the Covid recovery. An ERL guarantee would be low risk for the EU as property prices have, on average, increased by 5% per year. Over any given 30-year period, house prices have never fallen since records began in 1839, Sweatman says.

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The second is the provision, by the ECB, of refinancing for the banks originating the ERLs. The ECB could adapt its Targeted Longer-Term Refinancing Operation (TLTRO), which provides liquidity to EU banks that offer credit to the real economy, by allowing them to fund ERL portfolios with the ECB. Such an “e-TLTRO” program would allow banks to offload portfolios of ERLs to the ECB, removing risk and freeing up their balance sheets for more traditional lending. In turn, this would mean the ECB gradually “greening” its own balance sheet and delivering on its commitment to support EU climate action.

For banks to offer ERLs, Sweatman sums up, they “need the collateral to get [the ERL] approved by their credit departments and they need cash [from the e-TLTRO] to ensure that the ERL is cash positive”.

“[This approach] fits very well into the landscape of different types of finance needed to accelerate the renovation wave,” says Adrian Joyce, Managing Director of the European Business Alliance for Energy Efficiency in Buildings and Director of Renew Europe Campaign. “We need several different types of financial packages suited to different incomes and socio-economic groups,” he adds, noting that ERL would appeal to owners “with little financial flexibility,” such as retirees. or young professionals.

A complementary proposal

Sweatman says ERLs would not aim to displace subsidies for low-income households, and could complement existing renovation support programs, such as Germany’s highly successful KfW program and eco-loans to zero rate in France for vulnerable families, the eco-PTZ. In both of these existing cases, the interest rate payments are subsidized, requiring a commitment of taxpayers’ money that would not be necessary for an ERL.

Joyce suggests the main challenge will continue to be persuading homeowners to take out financing. He believes that banks have a key role to play here and notes that some are increasingly interested in energy efficiency. “Fintro Bank here in Belgium has a policy in place that whenever a customer applies for a loan for their home, the banker is required to address the subject of energy efficiency and building performance” , he said. A promising mechanism could be the introduction of mortgage portfolio standards, requiring banks to gradually improve the overall energy efficiency of the mortgage portfolio.

Another incentive, adds Joyce, is the soaring energy prices. “People are finally wondering why they use so much energy,” he says.

Sweatman notes that an EU renovation loan has been discussed in the European Parliament’s Industry, Energy and Research Committee to support funding for mandatory renovations that will be required in a revised directive. on the energy performance of buildings (EPBD). Sweatman believes that political tensions around mandatory measures designed to modernize buildings in the EU more quickly can be eased through more attractive financing solutions and the commitment of mortgage lenders. The European Council and the European Parliament are due to start negotiations on the Commission’s proposal to revise the EPBD, following the agreement of the a common position of the Council in October.

“We need to incorporate this idea of ​​an energy renovation loan into the revised EPBD,” said Claude Turmes, Luxembourg’s Minister for Energy and Spatial Planning, in a recorded speech during a webinar for launch the ERL on 3 November. “If we do, we have a solution to bring money to young people who want to build their nest and to retirees who want to prepare for their last decades.”

Editor’s note: Energy monitor is a media partner of the launch of the European loan project for the renovation of the climate strategy during a webinar on November 3, 2022. Full event details are available here.

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UK lending figures point to slowing economy and market turmoil https://agapesgr.org/uk-lending-figures-point-to-slowing-economy-and-market-turmoil/ Mon, 31 Oct 2022 10:45:00 +0000 https://agapesgr.org/uk-lending-figures-point-to-slowing-economy-and-market-turmoil/ LONDON, Oct 31 (Reuters) – Lending to British consumers rose less than expected last month and the number of mortgages approved by British lenders fell, according to Bank of England data released on Monday, which showed tougher times for the UK economy. The BoE said net unsecured consumer credit rose by 745 million pounds ($861 […]]]>

LONDON, Oct 31 (Reuters) – Lending to British consumers rose less than expected last month and the number of mortgages approved by British lenders fell, according to Bank of England data released on Monday, which showed tougher times for the UK economy.

The BoE said net unsecured consumer credit rose by 745 million pounds ($861 million) in September, the lowest monthly increase since December 2021, following an increase of 1.215 billion pounds in August. A Reuters poll of economists had indicated net lending of just under £1 billion.

Mortgage approvals totaled 66,789 last month, down from 74,422 in August, the BoE said, broadly in line with a Reuters poll forecast.

“September’s money and credit numbers indicate further signs that consumers have become more cautious in response to the weakening economic outlook,” said Ashley Webb, a UK economist at consultancy Capital Economics.

BoE figures showed a huge jump in money supply, which on the M4 measure rose 2.1% in September alone.

The last time there was a larger increase was in March 2020, when financial market turmoil at the start of the COVID-19 pandemic led to a squeeze in money market funds which had to sell assets such as government bonds and treasury bills for cash.

The September jump likely reflected a sell-off of pension fund assets to meet calls for guarantees following the ill-fated Sept. 23 economic growth plan of former Prime Minister Liz Truss’ government.

The M4 subcategory, which covers businesses like pension funds and life insurance companies, jumped to a record 67.8 billion pounds in September, more than double the previous record.

($1 = 0.8656 pounds)

Reporting by Andy Bruce; edited by David Milliken, William Maclean

Our standards: The Thomson Reuters Trust Principles.

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This call offering help with canceling a student loan is likely a scam https://agapesgr.org/this-call-offering-help-with-canceling-a-student-loan-is-likely-a-scam/ Fri, 28 Oct 2022 21:47:00 +0000 https://agapesgr.org/this-call-offering-help-with-canceling-a-student-loan-is-likely-a-scam/ The 40 million Americans eager to lose their student debt is being targeted by scammers who call, text and email with fraudulent offers of help, law enforcement officials warn. Criminals often adapt old scams to take advantage of current events, in this case using the Biden administration’s program to forgive up to $20,000 in student […]]]>

The 40 million Americans eager to lose their student debt is being targeted by scammers who call, text and email with fraudulent offers of help, law enforcement officials warn.

Criminals often adapt old scams to take advantage of current events, in this case using the Biden administration’s program to forgive up to $20,000 in student debt per borrower.

“The FBI typically sees this behavior when a new government assistance program becomes available,” Jeffrey Downey, special agent in charge of the agency’s field office in El Paso, Texas, said in a statement this week. keep the audience.

According to the FBI, which was joined by the Vermont Attorney General’s office to send an alert.

The potential scammers behind the calls may also claim to represent a bank or the US Department of Education. They then usually ask for personal information to supposedly start the loan forgiveness application process.

The scammers also send emails or SMS links from what appears to be an official government website, which then asks for personal information such as a person’s name, social security number and date of birth. birth.

Important things to remember to avoid getting scammed, officials say:

  • Accessing or obtaining assistance with any federal student aid program through the Department of Education or its partners does not require any type of payment.
  • Authorities are also warning against providing Federal Student Aid (FSA) credentials, saying the application is a scam and is being used to cut off contact between the borrower and the agent. of service, as well as to steal the person’s identity.
  • Borrowers are advised to be aware of the risks before refinancing student loans, as those eligible for debt relief who take out private loans risk losing what the government is offering, officials said. say.

Regulators already have their hands full of scams related to getting help with student debt. Criminals have long used real, but hard-to-navigate government programs to trick people into paying illegal fees or giving up personal information. The Federal Trade Commission in August said it was sending more than $822,000 in refunds to borrowers tricked by an illegal debt relief program.

People can make a one-time request debt relief until December 31, 2023, although for now a court order currently blocked the Biden administration to forgo the loans.

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Student borrowers could get up to $20,000 in relief https://agapesgr.org/student-borrowers-could-get-up-to-20000-in-relief/ Wed, 26 Oct 2022 09:27:52 +0000 https://agapesgr.org/student-borrowers-could-get-up-to-20000-in-relief/ Briona Bargerstock has big plans ahead of her. The 21-year-old student at Penn Behrend State is majoring in psychology and hopes to attend graduate school of social work and eventually law school. But like almost 43 million US students and graduates, Bargerstock assumes federal student loan debt. And despite obtaining scholarships and a PellGrantBargerstock, now […]]]>

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