About the Loan
The Fund’s loan mechanism of US$ 50 million was created in 1992 pursuant to General Assembly resolution 46/182. In the Secretary-General’s bulletin on the Establishment and operation of the Central Emergency Response Fund, (ST/SGB/2006/10), the loan element was included as part of the improved Central Emergency Revolving Fund now called the Central Emergency Response Fund.
The loan mechanism is used as a cash-flow mechanism by eligible humanitarian organizations to allow rapid access to funds ahead of the transfer of donor pledges.
The Fund’s loan mechanism has, over the last 15 years, disbursed approximately US$ 450 million in loans.
Who is eligible?
The UN, its funds, programmes, and specialized agencies, as well as the International Organization for Migration (IOM), and the Office for the Coordination of Humanitarian Affairs (OCHA) are eligible to apply for loans. The loan element is designed to act as a cash flow mechanism to ensure rapid and coordinated response to humanitarian emergencies. The loan element is aimed at strengthening humanitarian coordination efforts by ensuring that adequate preparedness measures are put in place to address humanitarian needs.
When should a loan be considered?
A CERF loan should be requested if an official pledge/commitment from a donor has been received, but there is a delay between the commitment and transfer of funds. The loan mechanism allows rapid access to funds to address this critical time gap in order to start humanitarian operations.
How to Apply
1. The operational organization should send a letter on agency letterhead to the ERC, with copy to the CERF Secretariat at cerf@un.org, specifying why the loan is needed and how exactly it will be used. The purpose of the loan must specify that it is a response to a humanitarian emergency. Loans must be repaid within one year from the date of disbursement.
2. A detailed budget for the overall loan amount must be attached using the CERF loan budget template.
CERF loan budget (Word - 24 June 2008)
3. A completed LOU. For a copy of the blank LOU, please send a request to Allison Watson with copy to cerf@un.org. Only one agency should be listed as the loan recipient. Note must be taken of clause 7B, which specifies reporting obligations.
4. Copies of pledge/commitment letters received by the agency which provide evidence that the operational organization will be able to repay the loan.
Amount which can be advanced
The ERC is responsible for determining the amount to be advanced in each situation. His decision may be based on:
• the current amount available in the loan element of the fund,
• anticipated needs in the near future for other loan requests, and
• documentation that the applicant will be able to repay the loan.
For additional Information
Queries related to the loan element should be forwarded to the CERF Secretariat at cerf@un.org.
[Last Update: 23 June 2008]
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