As per existing products, Funding Societies will provide financing to Micro, Small & Medium Enterprises (MSMEs) via investment notes, which is funded from investors. MSMEs will make repayments (principal and returns) to investors as per agreed schedule.

However, investment notes issued under the Guaranteed series will be guaranteed by an appointed entity (Guaranteeing Entity). In the event of non repayment by the Issuer (≥ 15 days past due (DPD)), the Guaranteeing Entity will repay the principal and return due to Investors. The rights to claim of debt from the Issuer will then be transferred to the Guaranteeing Entity.

The investment notes will be guaranteed by an appointed entity (Guaranteeing Entity). The Guaranteeing Entity maintains capital and cash reserve buffers to ensure investors are repaid in a timely manner when issuers are delinquent / default on repayments.

In exchange for the Guaranteeing Entity bearing the non-repayment risk, a fee will be paid to the Guaranteeing Entity. In other words, investors are giving up some of the potential upside (potential returns earned) in exchange for more stable and consistent returns.
 

When an Issuer misses a repayment (≥ 15 days past due (DPD)), the Guaranteeing Entity will step in and repay the principal and returns due to Investors. The rights to claim of debt from the Issuer will then be transferred to the Guaranteeing Entity.

There may be a possibility that the Guaranteeing Entity is not able to fulfill its financial obligations in a timely manner.

However, there are several mechanisms in place to ensure that the Guaranteeing Entity has the capabilities to meet its financial obligations. For instance, the Guaranteeing Entity is required to maintain capital and cash reserve buffers to ensure investors are repaid in a timely manner when Issuers default on repayments.
 

No. GN is open to all Investors.

Guaranteed Investment Note will be made available to investors via Auto-Invest as well as Manual Investment.