Flow Product or ‘Loan by Loan’ guarantees are provided at the time of origination. These are useful when the lenders wish to expand their risk box for higher loan amount, geographical market expansion or segment extension. The MG fee is ordinarily borne by the home-buyer.
Bulk Product or ‘On-Book’ guarantee is the guarantee given to a group of loans that have already been originated. It is used when the lender wants to shield its existing book (full or part) against future credit losses. On-book guarantee transfers the credit risk from lender’s balance sheet to IMGC’s balance sheet along with benefits such as capital relief and cash flow support for non-performing loans. On-book guarantee on the existing book is also taken during securitization transactions wherein, a lender sells an existing portfolio. In the on-book guarantee, the MG fee is borne by the lender.