Loan Security & Risk Fund


Frequent premature death of borrowers is a big impediment for microfinance program by which MFIs have been encountering a lot of troubles in attaining sustainability as well as improving productivity to reach their desired goals. In recent years, average life expectancy of people of our country increased significantly. In spite of this improvement large number of people of lower income segment still die at the middle age. Particularly, women constitute the most vulnerable group to death due to health complications and many of them die before entering old age. This has a negative impact in achieving sustainable poverty alleviation as the successors force to accept the financial burden of the deceased. Obligation to repay the unpaid debts fall on the heirs of deceased that turns into a complex situation for both successors of late borrowers and the service provider institution as well. On the other hand female borrowers after death of husband suffer from uncertain financial state as her spouse is the main utilizer/investor of the borrowed money.

ASA designed an innovative Loan Security & Risk Fund (LSRF) that addresses aforesaid problems efficiently freeing the successors of deceased debtors from the obligation of repaying unpaid credit. 

For taking this benefit of ASA’s female borrowers have to pay BDT 7 (seven) for per thousand taka loan to avail coverage for her as well as for her spouse/guardian whilst male borrowers have to pay BDT 3 (three) for per thousand taka loan to avail coverage only for him in every loan cycle. The statistics of the Loan Security & Risk Fund (LSRF) of ASA is as follows:


Category of ClientSubscription for each loan cyclePayment ModeTermSubscription ModeManagement of LSRF
All loan clients must contribute and participate in this product by paying a fixed subscription in each loan cycle.BDT 3 (for loanee) or BDT 7 (for loanee and his/her spouse or guardian) per thousand loan disbursement.Non-refundable but in case of death of Borrower or Borrower's spouse, the total outstanding loan is written offContinue throughout loancycle of borrowerBorrower will pay LSRF before receiving loan amount.ASA