Pooled Finance Development Fund Scheme

Pooled Finance Development Fund Scheme

The growth rates in India that are reflected each financial year are widely driven by the growth in the urban areas and cities. The rural sector in India has limited potential, being primarily dependent on agriculture. Also, the continuous decrement observed in the national poverty levels are being determined largely on the basis of urban cities. The Urban Local Bodies are liable for undertaking majority of the urban infrastructure development projects. They are vastly dependent on the funds provided by either the state governments or the local agencies. The poor administration in these local bodies poses a hindrance in financing such projects. They are unable to get resources from the market/financial institutions for investment in infrastructural projects. Being of the existing programmes of both the central and the state governments was a continuous gap between the availability and extent of needs of funds for such projects, more commonly found in small and medium-sized cities. The Government thus realized the requirement to provide direct access to capital markets for such cities. In order to make the local bodies self-sufficient and to ensure the availability of resources at all times, the Government introduced the Pooled Finance Development Fund Scheme.

FacilitatHelpe Urban Local Bodies to access capital and financial market for investment in essential municipal infrastructure.

Decrease the cost of borrowing to local bodies with appropriate credit enhancement measures and through the restructuring of existing costly debts.

Helps development of Municipal Bond market.

Helps the development of bankable urban infrastructural projects.

Responsibilities of SPFEs

WorOperatek in close collaboration and co-operation with the Municipalities/Urban Local bodies in urban infrastructural development projects.

CHose projects based on viability and priority.

Get an appraisal for the projects by recognized credit rating agencies in order to attract big investment.

Mobilize resources by means of issuing bonds and redirecting funds for investment in projects.


Establish and manage Credit Rating Enhancement Fund (CREF).

Sign proper agreements with the Central Government and ULBs/Municipality.

Make projects that are technically and financially stable and in tune with environmental norms.

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