InvestorQ : What is this lending facility that Mirae is offering against its mutual fund units?
Rashi Mehra made post

What is this lending facility that Mirae is offering against its mutual fund units?

Answer
image
Archita Jajjoo answered.
1 month ago
Follow

The South Korea based fund management group and one of India’s top ranked equity fund manager, Mirae AMC has launched a special lending facility against mutual fund unit holdings. The NBFC arm of the group, Mirae Asset Financial Services, has introduced ‘loan against mutual funds (LAMF)’, a new scheme that will be its pioneering offer for the unit holders of Mirae Mutual Fund units. The facility is largely electronic and seamless.

Under this facility offered by the fund, customers will be allowed to avail instant loans between the range of Rs50,000 and Rs3 crore by pledging their equity and debt mutual fund holdings. The entire process is electronic and seamless and can be managed through the mobile application itself. For investors, the standard haircut will apply depending on the nature of assets offered as collateral e.g. for equity funds it can be as high as 50%.

The reasons are quite logical. According to the CEO of the fund, the tendency among most investors is to redeem their investments when they need short term liquidity. This damages their planning for long-term goals. For instance, these loans can be availed to meet various needs like business liquidity, house renovation, medical emergencies etc. This facility gives the fund holders the much needed access to funds at minimal cost and minimal hassles.

8 Views