CREDIT MANUAL

CONSUMER
MICROFINANCE BANK
LTD

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The following pages represent the credit policies of Consumer MFB, herein known as CCM (Consumer Credit
Manual), to be followed in the sound administration of risk assets. These policies are intended to be minimum
guidelines to affect the most cost efficient standardized method of credit administration within the banking
industry for the benefit of customers, investors, shareholders and general public. In all cases, sound business
practice, good judgment and the Mission Statement of Consumer MFB LTD will be controlling principle
adding further input to this credit Manual. It is not our purpose to cover all instances, factors, or
circumstances regarding the administration of credit. It is our intention to standardize the guidelines under
which we operate to provide for our sustained and profitable growth in this and future years.

VISION STATEMENT
To be one of the most respected financial conglomerate, with effective presence
in Nigeria, Africa and the world.
 To earn the respect of our customers by listening, satisfying and exceeding their needs and
expectation
 To earn the respect of the employees by continuously improving our corporate reputation
and being employer of choice.
 To earn respect within the industry by promoting the healthy development of the financial
industry in Nigeria
 To earn the respect of the society by actively assuming corporate responsibility and
contributing to the development of the community we serve.

MISSION STATEMENT
Our mission is to provide exceptional financial services to our customers in our
chosen markets, through creative and dynamic application of latest technology
with greater emphasis on customer satisfaction.

To be an excellent bank able to attract, excite and nurture diverse and

committed staff with exceptional skill.

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 CONSUMER MICROFINANCE BANK ORGANOGRAM

The Board: Composition and Role

the Board is comprised of five members, which include the Chairman, three non-Executive Directors and the
Managing Director/CEO:

[Link] Baba Talle Chairman

AzubuikeAsomonye Managing Director

ChikaNwatu Director

AgboAdeka Director

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KodiOhakah Director

LEGAL DISCLAIMER

Terms of Use

Unless otherwise indicated, this Manual and its contents are the property of Consumer MFB LTD, and and/or
its subsidiaries, affiliates, or assigns (collectively "CONSUMER MFB"), and are protected, without limitations,
pursuant to Nigeria. and foreign copyright and trademark laws. By utilizing this Manual you agree to the
following terms and conditions. If you do not agree, you have the absolute right to submit your resignation,
and you should do so.

The works made available in this Manual are protected by Nigeria copyright laws and are provided solely for
the use of Consumer MFB Management personnel in context of the safe and profitable operation of our Risk
assets. Dissemination or sale of any of these policies, as a whole or in parts (including on the World Wide
Web), destroys the integrity of such works and is not permitted. The materials should never be made available
to those not authorized and/or bound by their use. All users are expected to abide by these restrictions and to
honor the intended purposes and the needs of those on these materials. No intellectual property or other
rights in and to this manual or its contents, other than the limited right to use set forth above, are transferred
to you. You may not modify, copy, distribute, republish, commercially exploit, or upload any of the material on
the World Wide Web without the express written consent of the Consumer MFB Group Board.

General Terms

Consumer MFB MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THIS MANUAL OR

ITS CONTENTS, WHICH ARE PROVIDED FOR USE "AS IS." Consumer MFB DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED.

To the fullest extent permitted by applicable laws, Consumer MFB and its employees, agents, suppliers, and
contractors shall in no event be liable for any claims, charges, and contractors damages, liabilities, losses,
and expenses of whatever nature and howsoever arising, including, without limitation any compensatory,
incidental, direct, indirect, special, punitive, or consequential damages, loss of use, loss of data, loss caused
by a computer or electronic virus, loss of income or profit, loss of or damage to property, claims of third
parties, or other losses of any kind of character, even if Consumer MFB has been advised of the possibility of
such damages or losses, arising out of or in connection with the use of this Manual.

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CHAPTER ONE

“Introduce the manual, and its objectives. It also explain the roles of a relationship officer and some guiding
principles in credit management”

1.0. INTRODUCTION OF CONSUMER MFB CREDIT

Consumer Microfinance bank Ltd formerly known as WUSE UNITED COMMUNITY BANK LTD was
established since 1995 and later transformed to Microfinance Bank status in 2007. The bank is one of the
pioneering and leading MFBs in Abuja with an asset base of over N100, 000,000.00, a customer base in
excess of 50,000 active accounts and salary accounts of over 40 ministries, agencies and security outfits.
Located at opposite FEBSON MALL in Wuse Zone 5, we have earned the trust and confidence of the
Government agencies and SMEs, thereby positioning the bank strategically to lead the meteoric growth of the
microfinance and micro leasing industry.
We are thus committed to providing efficient and responsive services to a select customer base, through a
team of skilled, innovative and dedicated professionals. Along with a state–of-the-art technology platform,
Consumer Microfinance Bank has strived ceaselessly to achieve its vision.

Ours is a culture anchored on: Integrity and professionalism; Team spirit; Continuous investment in our
people (10% of pre-tax profit budgeted for training); Leveraging on technology to achieve competitive
advantage and commitment to global best practices.

This manual will state the various risks associated to each asset and state the various MITIGANTS to put
ourselves in very conducive atmosphere. Therefore CCM should be a guiding manual to the following
category of employees:

CCM is a policy document for all experienced CONSUMER MFB staff with responsibilities levels that are
involved in credit administration directly and indirectly, this includes senior management,( policy makers)
Internal/ external auditors and reviewers.

1.1 CONSUMER MFB CREDIT MANUAL INTERPRETATIONS:

Interpretations to CCM should be done by a senior credit officer or a member of the bank’s Management
Credit committee. This interpretation is essential because, it serve as a feedback to the credit committee in
other to be able to achieve consistency and flexibility in the quest to credit administrations. However, any
interpretation of any such should be documented for future references with the particulars of the interpreter.

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1.2 APPROVAL OF UNCAPTURED FACILITY:

Any credit facility that was not captured in this CCM or related cases that deviates from the CCM document
should be approved by Managing Director/CEO limits, but when such facility is above the MD’s limit then the
MCC or credit committee of the board of directors should be sought.

1.3 CONSUMER CREDIT POLICY (CCM) VALIDATIONS AND AMENDMENT:

This credit manual otherwise known as (CCM) was approved by the Board of Directors of Consumer
microfinance Bank Ltd on Jan. 10, 2014. Copies of the minutes from the Board of Directors meeting to
ascertain authenticity of this ratification can be obtained from the Board secretary.

1.4 CCM REVIEWS:

This credit policy also known as CCM will be amended by the power vested on the Board of Directors of
Consumer Microfinance Bank Ltd annually or as the occasion demand to the best interest of the bank of the
bank in a prevailing economic conditions and regulation of the Bank activities.

1.5 OBJECTIVES:

Consumer MFB Ltd is inclined at giving of loans in accordance to the provisions of laid down guidelines for
management to create and maintain a prudent and balance the two goals of extending credit to borrowers,
investment obligors and other counterparts under terms that provide earnings for the bank and the
requirements for comprehensive credit risk management. Therefore, the objectives could be itemized as
follows:

- To give directions to credit personnel and technically empower them in making sound credit decisions.

- To raise the bank’s awareness as regards various risks possed by various credit facilities.

- To enable the bank not go off track from the regulatory authorities such as CBN, NDIC etc.

1.6 CONSUMER MFB LTD RISK MISSION STATEMENT

CONSUMER MFB LTD is bent at offering a good credit facility at a very minimum exposure of less than 2
percent PAR with effective monitoring.

1.7 CONSUMER COMMITMENT STATEMENT

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CONSUMER MFB Ltd is committed at using this credit manual to safeguard depositor funds, through
adequate loan administrations which could be achieved by properly following the tenets of the guideline also,
the staff and all involved including the customers should demonstrate high need for integrity and trust.

1.8 CONSUMER RISK TARGETS

CONSUMER MFB Ltd is bent at overall risk appetite or target of giving loans or credit facility to credit worthy
individuals and target industries that falls within its rating scale of ‘3, or better, hence, the board of directors
after all assessment want to have a rating of ‘3’ or BBB or better.

1.9 CONSUMER CREDIT POLICY GOALS AT A GLANCE

- Identify the credit risk in each credit facility investment or other activities that exposes the bank to risk.

- Maintain an overall credit risk for any exposures at a target maximum non-performing facilities below 2
percent.

- Organizes the credit risk management of the bank with other risks the bank might incur from engagement in
other activities.

- Properly acknowledging the different implications, and the extent of risk associated to various loans and
other activities posed to the bank.

- It will help the bank to put up A-Credit training and incentive programs that reinforce the group’s credit
policies.

- The credit manual or policy helps in managing, incurring, monitoring and overall credit system that complies
to relevant laws and regulations.

- Maintain acceptable levels of credit risk for existing, individual, credit risk exposures.

- Lay down regulations for each credit facility and other exposures of the bank.

- Provides accurate and timely tools to evaluate credit risk.

1.9.1 CONSUMER MFB CREDIT STRATEGY

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- CMFB credit manual will state categorically our willingness to grant credit lines, monitor, implement various
activities expected to result in bringing good returns to the bank at a maximum PAR of below 2%. - - The
bank is willing to grant facilities to customers based on economic activity, geographical locations, markets,
maturities and anticipated income or profitability. Furthermore, our strategy is to continuing allowing the
manual guide the bank in its credit facility and overall approach to credit.

- It is also as a strategy that senior management of the bank either at the credit committee of board of
directors, credit committee at the management level or whoever so designates to be responsible for the over
all implementation of the credit policy manual.

CHAPTER TWO

This chapter presents the major participants in the credit process and the relevant credit committees, their
composition and functions.

2.1 CONSUMER CREDIT MANAGEMENT AND APPROVAL

As the bank is poised at giving out loans which is the key and paramount objective of this policy manual, it is
therefore, imperative that several line managers, committees, senior management team and of course the
board of directors will be involved in different approval limits, having in mind the concept of a “single obligor”
which states precisely in the banks and other financial institutions decree act (BOFID) 1991 in section 20 1 (a)
stating that “A bank shall not grant more than 1% and 5% of its shareholders funds unimpaired by losses to
an individual or a company respectively. It is important that “BOFID” Act should be followed as it applies to
microfinance bank. Having said that various stages of approvals should be enshrined to ensure that approvals
is not concentrated in a single hand but, decentralized from the board to the line mangers in order to protect
this concept, lending authority must approve all facilities, loans and commitments to all clients which are as
follows:

- The full board of the bank (BD)

- The Board Credit Committee (BCC)

- The Management Credit Committee (MCC)

2.2 FULL BOARD OF DIRECTORS

The board of directors shall approve credit limits as it shall be stated in the CCM. The facilities to be granted
by the Board should be facilities above the lending limit or approval limits of the management credit
committee (MCC). Nevertheless, the Board of Directors as its so wish and desire may delegates this power to
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the managing director/CEO to approve on their behalf. However, the final authority and responsibility for all
aspects of credit and other exposures of the bank rests with the board of directors vie the management credit
committee (MCC). Responsibility of credit risk should be on the shoulder of the Board due to the fact that
they are involved in credit approvals either directly or through delegations.

2.3 THE BOARDS CREDIT RESPONSIBILITY SHALL INCLUDE:

- Approving of any amendment to the credit policies.

- Approving various credit structures of the bank and setting up of limits authority

- Approving of facility above the limits of MCC

- The board reviews the Bank’s internal control systems, credit and general audits reports, central
bank/NDIC’s examinations report, the statutory auditor’s report and any other reports.

The board however, could delegate any of the above functions to the executive directors if available or to
senior management team of the bank.

2.4 THE BOARD CREDIT COMMITTEE (BCC)

This body is a section of the board of directors constituted to act on behalf of the board in the capacity of
credit approvals or any other exposures activities or duties. It should also be noted that, this committee
functions or assignments should be seen as the board of director’s decision for the bank in respect to credit
matters and other related matters of the bank. Therefore, the functions of the full board of the bank, is also
the functions of the board credit committee.

2.5 THE MANAGEMENT CREDIT COMMITTEE

The management credit committee shall comprise the following category of personnel: The MD/CEO, Head
Accounts , Head of Marketing, Head of credit Risk management. Head of Operations and Head of
Administration and other corporate services.

This committee is to recommend approval of credit facility to the MD/CEO for facilities within the credit
approval limit of the MD/CEO and shall undertake the following responsibilities.

- Review and recommend to the board, the credit risk strategy, credit policy and procedure
requirements, Credit risk monitoring relating to investment and funds management activities.

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 - This committee shall work hand in hand with banks ALCO (Assets Liability Committee) to formulate
any strategy or policy necessitated to reflect changes in the bank’s balance sheet, changing
economic conditions in order to put the bank in a favorable situations at all times.

- This committee shall establish the bank’s prime lending rate (PLR).

- Approving changes in PLR, in line with CBN/Government regulations.

- This committee shall fix appropriate pricing for credit facilities.

- The committee shall approve new credit products and any financial products to include training,
education of necessary cadre of staff and set any essential incentives to staff of the bank as a
booster to the credit administration.

- This committee shall delegate some of its powers to who it deems fit in order to reduce much approvals on
their table for time management to be exemplified and flexibility to the discharge of their duties.

2.6 CREDIT ANALYSIS AND RATING

This committee also does the rating for credit.

- This committee shall also comprehensively develop and maintain loan procedures manual.

- This committee will as a matter of fact ensure that all entry to senior staff of all levels are educated
or enlighten about the manual.

- This committee shall Endeavour to liaise with the credit unit to identify credit culture gap for input
into the training exercise.

- The committee will determine the type of investment the bank should partake.

- This committee through the credit control team must ensure that all disbursement conditions
(conditions precedent to drawdown) are met.

- This committee must ensure that there is proper maintenance control and custody over all security
documentation and custody and maintenance of credit files.

- This committee shall ensure that provisioning for loans and advances in line with prudential
guidelines and the bank’s credit policy are in place.

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 - This committee will make credit risk reports ready for management and board of directors’
consumption.

- This committee shall prepare report for regulatory and other external bodies.

- The responsibility for the capital adequacy assessment process will lie on the shoulder of this
committee.

- The committee shall liaise with credit rating agencies and getting information required for the
bank’s rating.

- This shall ensure that incomes, fees, maturing repayments and other charges are captured.

- This committee shall escalate un-authorized credits.

- This committee shall ensure that proper recovery machinery is put in place and recoveries should
be pursued where necessary.

- This committee shall make account/relationship/loan officers answerable to the credit

booked under their supervision and of the giving of adequate information about customers
as they are the primary and the most, closest contact to the customer and standing
intermediary between the bank and the customers.

- The committee shall ensure that loan officers submit timely and accurately credit application for
new proposals and annual reviews, taking into account the bank’s credit assessment requirements.

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Chapter Three

3.1 TARGET MARKET & CLIENT FOCUS

Establishing a target market and a client focus form the basis of strategically

strong business and credit relationships. We do not intend to meet all the

financial needs of all customers. We shall thus focus our efforts on target markets specifically chosen
by us in line with the regulatory authorities.

The bank’s primary geographic market area is Abuja Federal Capital Territory. This market will be expanded
from time to time although this will be subject to management approval and subject to the CBN regulations
and our ability to grow our capital base to the level approved by CBN guideline for expansion of Micro finance
banks.

TARGET MARKET

i) Traders

ii) Institutions I.e schools

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 iii) Employees of the private sector

iv) Co-operatives societies and registered Associations

v) Self employed professionals and Artisans

vi) Civil Servants

vii) Students etc.

RISK ACCEPTANCE CRITERIA

1. For people in paid employment their appointment must have been

confirmed and salary domiciliation and /or option to debit at source must be
in place;

2. The facility amount should not be more than 40% of their annual net income;

3. The ISPO (Request) must be endorsed by the employer;

4. Their net worth must be more than 200% of the loan amount;

5. All the associations and co-operatives must be registered;

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 6. Beneficiaries must be up to date in the payment of their dues.

7. Emphasis shall be on financing of assets for co-operatives, which also

serves as a security.

8. All accounts seeking credit facility must have 25% forced savings of the
amount requested.

9. All account seeking credit facility must have their BVN number.

10. Credit search must be conducted for all account seeking credit facility born
by the customer as part of credit application fee.

11. Account officers must undertake to recover all loan recommended by them.

3.2 Compliance with laws and regulations

The credit risk management requirements set forth in this policy are established to conform to external
standards for safety and soundness. The principal applicable external standards include rules and regulations
issued by the Central bank, the Nigerian Deposit Insurance Corporation (NDIC) and the Banks and Other
Financial Institutions Act. Federal Banking Statutes and the laws of the Federal Government of Nigeria also
apply. In addition, the bank must comply with general Accepted Accounting principles.

Section 20 1(a) of the Banks and Other Financial Institutions Decree (BOFID) 1991

States that a Bank shall not grant more than 5% of its shareholders’ funds

unimpaired by losses to a company, its subsidiaries and associates. It shall be the responsibility of the
Approving Officers to determine whether or not related company obligations shall be aggregated. The basis
of their decision is to be documentedfor future references.

The employees, officers, and directors of the bank shall, at all times, conduct all activities related to the
acquisition, management, and disposition of investment securities, repurchase and reverse repurchase
agreements, investment security, safekeeping, loan approvals, loan servicing, loan operations, and all other
related activities in a manner that completely conforms with all applicable laws and regulations which are
covered by regulations of this policy.

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Following from this, a relationship officer is required to follow the loan disbursement processes stipulated in
this policy manual. A relationship manager is expected to act within the provisions of this policy. Failure to act
according to the directives attracts a warning cum punishment which may be prescribed by the board,
Mgmt./ Committee for sanctioning purpose.

3.3 General Requirement for Desirable Loans

All loans should have a reasonable identifiable purpose or purposes which are recorded in the credit file for
the particular loan. (Requirements for credit files are described in another section of this policy). The purpose
must be legal and enforceable under the law of the Federal Republic of Nigeria.

3.4 Loan Repayment Sources

It is a fundamental policy that the primary source of repayment of a loan should be established before the
loan is granted to the customer. The sources from which loans are repaid are as follows:

1) Cash flow from operations in the case of business loans or from net income after tax and after required
payments in the case of personal loans.

2) From the creation of new capital.

3) From conversion of an identified and acceptable asset to cash.

4) From refinancing by another financial institution

The primary source of repayment may be either one or a combination of the four available sources.

All loans must also have an identified secondary source of repayment. The secondary source of payment,
although not to be relied upon as a primary source, may be available collateral/guarantor.

3.5 Undesirable Loans

The following types of loans are considered to be undesirable:

1. Loans lacking financial information or other reliable evidence of the borrower’s ability to earn money
and repay (subject to the relevant section of this policy)
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 2. Loans based on unsubstantiated collateral of undeterminable value

3. Loans for speculative investment in securities, inventory, or real estate (subject to the relevant section
of this policy)

4. Credits with uncertain or speculative cash flows

5. Highly leverage transactions (subject to the various financial ratios that would be approved by the
Board and defined in the credit scorecards from time to time)

6. Conflict of interest loans in which bank officers are personally involved.

7. Loans dependent upon the sale of real estate for liquidation, unless there is a takeout commitment
from another bank.

8. Loans to start-up businesses.

9. Any loan where the character, integrity and/or the honesty of the borrower or its principals is
questionable.

10. Loans secured by stock in closed or closely held corporations where the stock has no ready market
and the financial information of the principals involved does not support the extension of credit.

11. Loans in which we hold a subordinate or inferior position.

12. Working capital loans to a business, where the loan cannot be repaid within a reasonable time except
by the borrower re-financing elsewhere or liquidating its business.

13. Loans to high-risk Industries e.g, Politicians, Contractors etc(rated 7 and above) without full collateral

14. Loans to high politically risky and high-profile customers without full collateral

15. Loans to high-risk customers (rated 6 and above) without full collateral

16. Credit to governments, Government institutions and government contractors, except through
standardized product programmes.

17. Loans to finance perishable goods except under a product paper with adequate mitigants as may be
approved by management from time to time.

18. Loans structured without specific repayment requirements that match, in both their amount and their
timing, with the amount and the timing of the identified primary source of repayment for that loan.
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 Any exceptions to any of the above undesirable credits must receive approval of the Board Credit &
Investment Committee.

3.6 Documentation Requirements for Loans

It is fundamental policy of the bank that all loans be properly documented.

A. All loans must be documented by a promissory note. This includes both open-end and closed-end
extensions of credit. It includes both secured and unsecured extensions of credit. The promissory
note must specify:

 The name of the borrower

 The amount of the credit
 The applicable interest rate (if the loan is made at a fixed rate)
 The maturity date
 The source of repayment
 The collateral used

B. For all business loan borrowers, the bank shall have a commitment letter, an offer letter, or a
complete loan agreement. This document shall list any terms, including but not limited to
guarantees, collateral, collateral advance formulae, required reports, that the bank requires for the
transaction.

C. Each extension of credit shall be supported by written evidence of:

 Required pre-approval credit analysis and compliance with credit policy limits.

 Approval by the Credit Committee, if applicable.

 Required on-going credit analysis and compliance with credit policy limits, in the case of
renewals or modifications of existing loans.

D. Basic requirements for loan documentation are procedural and vary considerably according to loan
type. Loan officers shall follow the documentation procedures set forth by the bank. Since loan
documentation is a highly specialized and sometimes complex topic and since documentation is
critically important, Loan Officers are encouraged to seek advice from Line Managers/Head of Unit
whenever there is any doubt about proper documentation.

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 E. Loan operations personnel shall, as part of the procedures for making loan disbursements, verify that
the bank possesses the required documents for each transaction.

F. Credit Monitoring procedures shall include;

 Procedures for reviewing loan documentation

 Procedure for ensuring daily monitoring by account officer
 Procedure to ensure daily or weekly repayment
 Procedure to ensure collateral adequacy.
 Procedure to ensure that the account is on NDS for proper monitoring.

Chapter Four

4.1 TYPES OF CREDIT: The Bank shall grant credit facilities to deserving clients only when it conforms to
the legal requirements as stipulated by the bank on the offer letter given to the client. The client is notified in
writing by an offer letter which contains the following.

 The type of credit to be offered;

 The maximum amount available;

 The tenure of the credit

 The interest rate and fees for the credit

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  Conditions for draw down;

 The source and mode of repayment of interest and of principal.

Before an offer is made to a client, the bank lending capacity must be considered. If, the amount is large
confirmation for funding should be sought from, the treasury/Operations and necessary approval obtained. An
offer Letter is a commitment by the Bank to lend to a customer provided all the terms and conditions
contained therein have been met. Consequently, it is advisable that Loan Officers obtain legal input before
sending out such letters.

4.2 UNADVISED CREDIT FACILITY OR GUIDANCE LINES

In order to effectively manage the banks exposure, an approved facility may not be communicated fully to a
client or a Loan officer may decide not to advise the full amount of the facility approved for client. This may be
done for the following or other reasons:

(a) To keep a client’s account balance within the scope of cover provided by its collateral.

(b) To keep in check the activities of a client with a track record of over trading or who is constantly
exceeding the authorized limits.

(c) To enable a Loan officer get to know a new client in depth before committing the bank to the client
extensively.

(d) To be able to respond quickly to emergency needs for additional lines.

A Loan officer shall be allowed to exercise his/her discretion on the extent of drawdown on an unadvised line
subject to the line limit.

4.3 Overdrafts (ODs)

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This facility is a line of credit that allows client to write cheques in excess of the actual balance on the
account with charges on the excess drawn. This is usually provided to help a client meet working capital
needs and as such it is often collateralized by a floating charge over the borrower’s current assets and or
personal guarantees of high net worth owner-proprietors or key directors of the borrowing company.

The use an OD should be restricted to working capital requirements and as such it fluctuates regularly and
even moves into credit as business cycle is completed.

It is an open credit, which can be used repeatedly until the balance on the account reaches a certain pre-
arranged limit with a specific repayment date, usually one year or less.

In order to ensure that a customer repays when requested to do so, a clean up clause may be included in the
offer letter, this will enable the customer to wind down on the OD line at a specific time before redrawing on
the credit.

One major risk innate in this type of facility is the tendency of the client to draw above the authorized limit;
this situation may result from overtrading or slow receivable collection. It is therefore imperative for the RM to
study the client’s business and satisfy himself as to;

 The justification for the overdraft required

 The usage of the facility matching the client’s business cycle and

 The client’s profits being able to absorb the interest payable by carefully assessing its profitability.

Overdrafts may be approved and structured as either advised or guidance line facilities. It must meet the
bank’s legal and internal documentation guidelines. Drawings against unclear effects can only be
authorized within the limit of the existing approved current line facility. If such drawing shall push the available
balance above the authorized limit, a temporary facility form must be prepared for it and approval sought at
the appropriate authority level for the new balance.

An OD line may be called in or declined during the annual review if performance of the facility during the year
has been poor, unprofitable or becoming a hardcore. However, it is imperative that a formal notice be
given to the customer if the overdraft line is to be cancelled, frozen or the amount closed. If this is not
properly communicated, it may expose the bank to litigation.

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 4.4 LEASE FACILITIES

Consumer mfb Ltd can buy or fund the purchase of a capital asset at a client’s requests and hire or lease it to
them at an agreed rental. The title of the asset vests in the bank until the last installment is paid and the client
exercise its option to purchase the asset at the pre-determined price stated in the lease agreement.

The bank will finance leases for a wide range of equipment in normal use such as textile machinery,
computers, industrial machines, telecommunication equipment, boreholes, motor vehicles, household
appliances .etc

The Bank must take continuous, comprehensive insurance policy from a first class insurance company on the
asset and the cost charged to the client’s account. In all cases, the bank must be noted as “First Loss Payee”
beneficiary. To further protect the bank against risk such as poor maintenance of its asset, the client is usually
requested to pledge other collaterals or create a charge over its floating assets in favour of the bank.

Leases must be priced on a floating rate basis, except where specific approvals for fixed rate pricing have
been obtained from the MCC. While leases require special terms and conditions, these should be in line with
the bank’s general credit policy and regulatory requirement.

A lease facility must be structured to allow the bank to effectively repossess the asset leased promptly in the
event of default by a customer. The terms of a lease facility should therefore include “material adverse
change” clause and a “cross-default” clause. The inclusion of these clauses will enable Consumer MFB Ltd to
repossess the assets in the event that the client:

a) Embarks on a trade other than that for which the leased asset was originally financed by the bank

b) Has defaulted in its obligations to other lessors who could take steps to enforce their rights under the
lease agreement

c) Has a deteriorated financial position and is likely to default.

A lease facility is a risk asset like any other credit exposure. Regardless of its nature, the same standards of
credit analysis, documentation, client contact and responsibility apply. The analysis should also recognize the
tenor of the lease

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4.5 DIRECT CREDIT {CHEQUE DISCOUNTING}

Good clients with substantial turnover, per annum and who have strong management can be offered direct
credit (instant credit) for cheques lodged into their accounts for clearing. Financial institutions are often given
this facility if they are carrying a risk rating of” A” Where the risk is low and provided the client has no record
of returned cheques, the LO/RM can recommend the client to the Management Credit Committee (MCC) for a
direct credit line.

All direct credit must be approved through the normal approval process and must be backed by appropriate
agreement. Number of returned cheques should be noted in the credit auditor’s report which shall
recommend the line for cancellation. Quarterly management accounts must therefore be received from all
beneficiaries of Direct Credit facilities. If a client has record of more than one returned cheque in any month
the facility should be presented by the LO/RM for cancellation. Where the LO/RM does not recommend a
cancellation of direct credit this should be documented in the credit file within a week of the second unpaid
cheques with reasons for cancellation.

4.6 BANKERS; ACCEPTANCES (BA)

Bankers’ Acceptances are trade bills (a commitment to pay). They are usually between 90 and 180 days and
are drawn on and accepted by banks on behalf of their customers. The bill can be sold to a third party usually
at a discount. By accepting the bill (signing accepted on the bill) the accepting institution guarantees payment
of the bill. These instruments are provided for clients to finance imports of raw materials, or local orders with
a short turn around cycle. The facility is usually revolving and available for periods up to 12 months. Often, the
line is available on standby to fund a specific type of transaction for which it was approved. They are often
secured by a lien on the products financed or the resulting receivable. Roll-over is dependent on prompt
liquidation of the earlier draw down and the facility may be cancelled by the bank if the client fails to perform
creditably even though the full term has not expired. Bankers’ Acceptance lines are therefore structured to
allow the bank to cancel the facility.

4.7 TERM LOAN

This includes any non-revolving facility with tenor of beyond 12 months from the date of approval or the date
of first draw-down whichever is earlier. Term loans are used to finance capital projects or customers’
expansion programme. This is basically a cash flow lending since repayments would come from the cash
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generated by the project being financed. Repayments are made in instalments at pre agreed times and
should be tied to cash generated from by the expansion programme. This type of lending must be backed by
independently verifiable cash flow projection based on sound and realistic assumptions. Term loan must be
well secured, backed by a well-prepared and executed Loan Agreement.

It is the bank’s policy not to encourage term loans with tenors of over three (3) years except for Agricultural
Credits.

4.8 BONDS AND GUARANTEES

A guarantee means an undertaking by the bank (obligor) to effect payment to another party (beneficiary) if the
bank’s customer, on whose behalf the undertaking was made defaults in his debts or obligation to the obligee.
It could be an agreement by a third party to pay to the bank should the bank’s customer be unable to meet its
obligation to the bank. These instruments do not form part of the Bank’s direct credit exposure however they
represent contingent liabilities where the bank substitutes its credit for that of its client.

The bank will offer these products subject to the following conditions:

(a) Such instruments are backed 100% by cash or other acceptable security.

(b) The Bank must receive a fee of not less than 5% of the guarantee amount.

(c) A letter of indemnity from the obligor to the Bank with an unqualified obligation to reimburse the
Bank on the same condition as the bank has paid.

(d) The Bank’s undertaking must be limited to a stated amount.

(e) The Bank’s obligation to pay must arise only upon the fulfilment of certain specified conditions.
This includes the presentation of specific documents which must be worded so that the Bank will
not be called upon to determine questions of fact or law.

(f) The Bank’s undertaking must contain a specific expiration date or a definite term.

4.9 CANCELLATION OF BONDS & GUARANTEES

1. As a general rule, the Risk Management Officer will cancel and remove control of a guarantee (i.e.
remove the guarantee from the Books) only after certification from the bank’s credit unit of the return of the

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original instrument. However, in the event the beneficiary has not returned the instrument even after the
expiration of the period, the following conditions must apply prior to removal of control:

i No written confirmation from the customer on whose behalf the guarantee was issued is
needed or

ii A month’s time has elapsed since the expiry date, inclusive of claim period or

iii At least a month has elapsed since a follow-up letter sent by the Bank to the beneficiary asking
for return of the original bond.

2. The Head, credit & marketing must approve each cancellation not supported by the return of the
original bond.

3. In no case should control be removed prior to expiry date inclusive of claim period without the
return of the original bond, unless the text of the guarantee is specifically worded so as not to
require the return of the instrument to the Bank on expiry.

4.10 GUARANTEES WITHOUT EXPIRY PERIODS (OPEN-ENDED GUARANTEES)

In those instances where we issue a guarantee, which does not carry a specific expiry date, full cash
collateral will be required, including an additional margin for interest if applicable under the terms of the
guarantee. This requirement may however be modified or waived by the Board Credit Committee, or the
Managing Director.

4.11 SYNDICATIONS

Loan syndication is a process whereby a large loan package is put together by a number of financial
institutions acting in concert. This process is usually extended to the banks prime clients for such reasons as,

a) The amount being requested is too large for one bank alone to provide against the back drop of the
credit limit imposed by the regulatory authority.

b) The client is interested in dealing with other banks and interested in sharing the risk with other banks.

Due to the fact that syndication is a time consuming process and impacts on the banks reputation in the
industry, a number of things must be borne in mind while undertaking such task on behalf of the client.

a) Approval of the transaction/ loan offer.

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 b) Receipt of written mandate letter from the prospective client

c) In-house approval of credit proposal and or participation

d) Written agreement with the terms and conditions under which the other banks will be involved.

e) Preparation of confidential loan placement memorandum.

Consumer MFB will participate in any process of syndication as long as it conforms to the principles
and procedures regarding the banks credit policy regulations.

4.12 TEMPORARY OVERDRAFTS (TODs)

These are temporary accommodation on a client’s current account. TODs must be repaid within thirty (30)
days, however, multiple withdrawals are allowed within the approval limit. Tenor and conditions are stated on
the TOD request Form. All TOD request forms showing customer’s execution of the TOD agreement must be
accompanied by the agreement properly executed and kept in the customer’s credit file.

(a) TODs may be approved by credit committee without aggregating with other approved facilities
provided: They do not exceed 10% of the approved limit of the credit committee or 10% of the total
credit facilities approved for that client whichever is lower.

(b) The relationship is not adversely classified.

© The customer account must be placed on NDS ( Non Debit Status or Post No debit)

4.13 LOCAL PLACING AND TAKING LINES

For placements, guarantees and other direct obligations, Consumer MFB Ltd’s exposure should not be more
than a certain percentage of the recipient’s net-worth that will be agreed upon by the board of Consumer
MFB.

These are guidance limits that are to be applied with caution owing to the volatility of the treasury market.
More current information may caution you to place less than the approved line.

Local banks are categorized into three main groups to reflect their relative credit risks thus:

a) Category A
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 The Large and dominant commercial/Universal banks

b) Category B

The medium sized well-managed commercial/Universal banks.

c) Category C

Other Well Managed Financial Institutions approved by the board from time to time.

The tenure of placement line should not exceed three months except when its CBN treasury bills. At the
request of the Credit & Marketing Unit, the line may be suspended. An emergency meeting of the MCC may
also be convened to suspend placement lines with any bank if there is a good cause to do so. Once a
placement line is in force, the Credit & Marketing Unit in conjunction with the treasury unit will decide the
volume and tenor of individual placements with each bank. However the aggregate sum must be within the
approved placement limit.

No restriction will however, apply to taking from other banks unless Consumer MFB Ltd has suspended
dealings with such banks.

4.14 LPO FINANCING

This includes financing of local purchase orders or contracts involving the supply or delivery of visible items
or products whose specifications are set out in the contract agreement or document. These LPOs must be
from reputable organization such as embassies, Blue chip companies and government agencies.

The counterparty must be liquid enough to pay for the jobs and the payment of the LPOs must be domiciled
in the bank (consumer MFB).

In granting LPO credit financing the Loan Officers should look out for the expiring date on the LPO and must
make sure that the fund is not diverted. All LPO financing must go through the normal approval process.

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Chapter Five

Credit Analysis and Presentation.

5.1 Credit analysis

Failure to properly monitor the quality of loans, investment securities, depositories, and other counterparties
on a periodic basis may result in risk exposures that are unacceptable to management. The starting point for
any credit should be the question “should we be doing this”? We will refer to this as the Strategic Appraisal.
This looks at the credit from a strategic viewpoint. The evaluation of all credit proposals must be based on a
written analysis. While the content of specific analysis may vary based on past experience, each analysis
must address the following minimum considerations.

 The impact of the credit on the Bank’s total portfolio,

 The trend in the client’s industry,

 Their client’s competitive advantage in the industry it operates.

 Clients operations,

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  Clients management,

 Clients financial position,

 The particular transaction being considered and

 The risk of the credit.

5.2 Credit Initiation

On the Credit Initiation and analysis process, the market will be principally Retail Credits – Small Business,
Medium Enterprise & Consumer credits

5.3 INITIAL CREDIT REVIEW REPORT

As part of the process for determining the viability of a credit request before committing the banks resource
to the credit, the application has to pass through the initial credit review and as such the Loan officers shall
assess customer’s legal capacity to borrow, carry out basic bank and professional checks including CRMS
check, direct or indirect enquiry from customer’s Suppliers.

Initial credit review stage places more emphasis on the qualitative issues relating to the borrower. Strict
financial analysis may not be critical at this stage.

At the Loan Officers’ Level a decision is taken whether or not to deploy the Bank’s resources in processing
the credit. This process is expected to be completed in a maximum of 48 hours and decision is
communicated to the customer. Loan officers who feel strongly convinced about the viability of a credit or
deal are free to escalate the Credit Appraisal memorandum report to MCC.

5.4 RETAILS & CONSUMER CREDITS

Retail and consumer credits will largely be driven by standardized credit product programmes as the bank
subsequently migrates to adopt credit-scoring models for processing these facility applications and
monitoring their credit quality. While the model is relatively new, the bank will subject credit applications to
rigorous review until the model has stabilized.

5.5 Ratings Review

The rating review can be two-fold:

 Continuous monitoring by those who are assigned the grading, being the Loan Officer who generally
have a close contact with the borrower and are expected to keep an eye on the financial stability of
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 the borrower. In the event of any deterioration the grading is immediately revised/reviewed. (Normally
a credit risk grade should be reviewed at least once in a year. For risk grades starting from 6 to 9, the
rating should be reviewed every six months).

 Secondly the credit Monitoring functions of the bank should also conduct periodical reviews of
grading at the time of risk review of the credit portfolio. Details of this are provided in the section
below on On-going Evaluations of Credit Risks.

The credit risk of each proposal loan obligor must be evaluated. This applies to:

 All loans or commitments

 Open-end (lines of credit, etc.) and closed-end (term loans, instalment loans, etc)

 Consumer and business purpose extensions of credit

 Advised and unadvised commitments

 Revocable and irrevocable commitments

 Direct and indirect loans

 Loan participations purchased

 Overdrafts

 Leases

Minimum Credit Quality Standards for Extensions of Credit to Non-Business Obligors and Associated
Limits.

A. Each retail loan application shall be originated by the Loan officer and approved by a Unit Head
subject to the existing approval limit, then reviewed by Management Credit Committee.

B. At all times, Loan Officers will obtain applications and the application fees, provide information to
applicants, evaluate applications, and conduct all other related activities in complete compliance with
the specific product programme requirements and policy.

C. Loan Officers must use the bank’s standard product Loan application forms, disclosure documents,
and loan documents as set forth for each particular type of loan.

D. Retail Loan Officers must evaluate the following factors:

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  The applicant’s credit history with our bank, if applicable

 The applicant’s credit history with other parties.

 The applicant’s income after taxes in comparison with the applicant’s total required cash
outflows, including the proposed loan payment. This evaluation must be made from both the
financial information supplied by the applicant on the standard loan procedures such as copies
of pay stubs, statement of accounts etc.

E. All retail applicants must meet the following minimum debt service capacity standards:

Minimum Credit Quality Standards for Extensions of Credit to Business Obligors and Associated
Limits

A. At all times, Loan Officers will obtain applications, provide information to applicants, evaluate
applications, and conduct all other related activities in complete compliance with all applicable laws
and regulations.

B. All business loan and lease applications must be handled in conformity with the requirements of this
policy

C. The bank’s management credit committee shall review the credit rating assigned by a Loan Officer to
each business loan or lease application. There shall be an obligor rating and a facility rating for each
credit under the credit grading system

D. The following minimum credit quality standards shall apply to all business loans approved by
individual Loan Officers acting under their individual delegated loan approval authorities. However,
these minimum credit quality standards shall not apply to loans approved by the management Credit
Committee which is expected to make a careful, less formulaic, evaluation of credit quality.

5.6 Documentation of Pre-Purchase Credit Risk Assessments

A. The reasons for approval, conditional approval, or decline of all credit requests must be
appropriately documented.

B. All information utilized in the evaluation of credit requests must be retained. Financial statements,
reference information, correspondence, and all other material documents for approved loans must be
retained in separate credit files for each borrower.

5.7 Securities That Do Not Require Pre-Purchase Credit Risk Analysis

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 A. No pre-purchase credit analysis shall be required for financial instruments that are issued by the
Federal Government. These issues are rated “AAA” or its equivalent or are considered to have implied
“AAA” ratings.

B. No pre-purchase credit analysis shall be required for financial instruments that are fully guaranteed or
fully insured, as to both principal and interest by the Federal Government. These issues are rated
“AAA” or its equivalent or are considered to have implied “AAA” ratings.

Chapter Six

Chapter six discussed the lending, authorities in the bank. It also contains the approval procedures, levels
and limits in the bank.

6.0 The key factor to the corporate existence of a bank is to make profit and loans are the major source of
profit actualization. It is therefore necessary that loans should be given and so, there must be approvals of
such credit to be approved by different approval authorities. For approvals to be made Loan Officers must
have sufficient information to evaluate a potential borrower’s character, collateral, capacity and capital.
External conditions must be evaluated to understand the external conditions, which will affect the borrower’s
ability to meet their financial obligations.

In the course of giving of various approval guidelines or limits cognizance should be placed on the
CBN/BOFID act which states that “Bank shall not grant more than 5% and 1% of its shareholders’ funds
unimpaired by losses to a company and individual respectively. Therefore, for 5% and 1% (Company and
Individual) or more of shareholders funds to be channel into credit facility to customers is subject to the
ratification or amendment by the Board of Directors. Hence, the shareholders (Board), has the sole right to
give exactly or more by means of approval facility of 5% or more of the shareholders fund.
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6.1 The following are the lending authorities of the bank:

(1). The full Board of Director (BD)

(2). The Board Credit Committee (BCC)

(3). The Management Credit Committee (MCC)

6.2 THE FULL BOARD

The full board of directors shall consists, all the board of directors before such facility is granted. In this
instance the 5% “single Obligor” limit and above shall be solely granted by the full board but the board has
also the right to delegate this power to the board credit committee.

6.3 THE BOARD CREDIT COMMITTEE

This committee consists of a section of board members who are inclined credit wise that is, having credit
knowledge administration for the function of credit approval of limits prescribed and adopted by the board of
directors.

6.4 MANAGEMENT CREDIT COMMITTEE (MCC)

The management credit committee consists of the chief risk officer or anybody acting in that capacity, Head
of marketing Credit, Head Accounts, Head internal control and any other persons the management feels
should be included in this committee of credit approval.

6.5 APPROVAL PROCEDURES

Credit granting must take certain steps for it to be granted as loans and facilities not duly granted cannot fly
or be disbursed. It is therefore, important that, inasmuch as the Loan officers / managers are directly
responsible for loans booked under them, a minimum of three credit officers shall approve facilities and one
of which must have an approval limit as regards such facilities.

Therefore, loans and facilities should be packaged by Loan officers / managers and pass onto line managers
for evaluation process to ascertain low risk rate and profit inclined and how repayment or accruals should be
without a default of such facilities. Hence, the sequence is as follows:

(1). The account officer/Loan officer packages the facility and ensure full documentation necessary for its
approval.

(2). Reporting line officer shall agree with the judgment as well as the management credit committee
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(3). The third officer which is the MD/CEO may approve the amount if the amount falls within the limit
authority, but if the amount exceeds the limit then such facility should be recommended to the Board credit
committee.

- In the exceptional case where the above committees are not available, approvals should be sought from
any higher level available and documented for posterity sake.

- Every credit officer involved in the approval process shall state his or her independent evaluation
of the merits of the credit by signing the credit.

- All credits so approved would be reviewed by risk management/Internal control for compliance
with risk acceptance criteria/Bank’s credit policy.

- The account officer shall be responsible for communicating the credit to the client by the way of an
offer letter. He will also ensure that the approval is put on the computer system, by presenting to
the Operations unit with evidence of full compliance by the customer, with conditions president to
the facility disbursement.

- Hence, risk management on its part shall advice the Operations Unit of all credit approvals promptly so that
risk management can plan its asset and liability portfolio efficiently.

6.6 CONDITIONS PRECEDENT TO DRAW DOWN AND DISBURSEMENT

Conditions precedent to disbursement and draw down shall only be allowed on a facility when the conditions
precedent in the offer letter has been fulfilled. In some instance where risk management defer some
conditions there should be an approval of the managing director.

- All credit disbursed where documentation was deterred or waived shall be reported and circulated
by Operations Unit.

- In other facilities like overdraft facilities, before actual disbursement takes place, the facility has to be on the
computer system. The credit unit officer should ensure that proper approvals are in place before doing so.
This also goes for term facilities like term time loans, leases, etc. it is therefore, important that approval limits
shall depend on the amount of the facility except otherwise.

6.7 LEVELS AND LIMITS

See the diagram below:

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 DELEGATED
APPROVAL
AUTHORITY LEVELS

Approval Authority Approval Limit (% shareholder’ Absolute Limit as at December,

funds) 2014

Full Board Above 5% shareholders’ fund

Board credit committe Above N500,000.00

MD/CEO N200,000.00 to N500,000.00

Management credit N50,000.00 to N200,000.00

committee

Line Manager Below N50,000.00

Regulatory legal lending limit, – 5% and 1% of shareholder’s funds for corporate and individual respectively.

Note: These are the approval levels as at the policy roll out date.

The board may choose to shrink or enhance the percentage in line with the risk appetite

Chapter Seven

General Requirements for Loan Collateral

7.1 Collateral Requirements for Loans

The Board of Directors of the bank recognizes that collateral does not, by itself, convert a bad loan into a
good loan. However, the Board of Directors recognizes that a well-secured loan has less credit risk than an
otherwise equivalent unsecured loan and therefore encourages the Loan Officers and the management Credit
Committee to obtain collateral whenever prudent.

The choice of collateral and the required amount of collateral the bank will accept will depend on a number of
factors.

1, the nature of the credit being sought

2, the amount of credit being sought

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3, the integrity of the customer and

4, the duration of the credit

7.2 QUALITIES OF GOOD SECURITIES

 TITLE: A good security must possess a title and this must be easily determinable
 VALUE: Value of a good security must be easily ascertained. Any security whose value Is not easily
ascertained will not be acceptable.
 MARKETABILITY: Must be capable of being marketed
 TRANSFERABILITY: Must be easily transferable.
 TANGIBILITY: A good security must be tangible, Possessing certainphysical features
/characteristics that identify it as such.

7.3 Securities Acceptable by the Bank Include:

1. Debenture

2. Land

3. Letter of Pledge or Trust Receipt

4. Guarantees/Post dated cheques by the guarantor/the customer

5. Letter of Lien/Set-off

6. Domiciliation of Payment

7. Vehicles/Chattels

8. Letter of lien/set-of

7.4 Application of Collateral Requirements

A. Recognizing the importance of collateral to the safe and sound conduct of its lending activities,
each relationship manager is directed to take the utmost care in reviewing collateral values and
relating collateral values to loan amounts. The minimum standards set forth in this policy shall be

35 | P a g e C O N S U M E R C R E D I T P O L I C Y M A N U A L Revised 29/7/2015
 followedstrictly for internal use. Loan Officers are reminded that these standards are merely
minimum guidelines and that awareness of special circumstances, prudence, and good judgment
will require more conservative valuations in many circumstances.

B. Assessments of collateral value should reflect standards internal bank discounts. These valuation
guidelines are only for use in estimating or reporting collateral margins. Advance formulas are
usually different. These standards are intended to optimize our collateral analysis and should not
be construed to imply any limited opinions of realizable market values.

C. For all the types of collateral, the internal assessment discounts shall be applied to reduce
collateral values before further reducing said values by the amounts of debts owed to senior lien
holders, if any.

D. Even though support staff may do much of the works, Head, Credit & marketing shall be
responsible for monitoring and reassessing collateral values with as much frequency as changing
market conditions and other circumstances shall require. In general, marketable securities and
tangible commodity values should be verified at least monthly. Other collateral values should
generally be re-established annually.

E. Specific policies with respect to certain types of secured loans are set forth in another subsection
within this policy section.

7.5 CREDIT COLLATERAL DOCUMENTATION

Experience has shown that greater losses arise from incomplete or not fully processed loan documentation
than from defaults.

Loan Officers are fully responsible and accountable for loan documentation and this responsibility must not
be delegated to others.

Head, Credit & Marketing are to ensure that counter-parties satisfy all credit approval terms and conditions
including provision of legally enforceable documentation of existing assets at stated value as credit facility
collateral.

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It is important that Loan Officers ensure that borrowers comply with Loan Agreements. In each offer letter, a
compliance check of the covenants is to be reported and if violations have occurred, either an action is to be
recommended or waivers requested.

Where possible, the Loan Officers should also be familiar with agreements entered into by the borrower with
other lending institutions.

Chapter Eight

8.1 CREDIT ADMINISTRATION AND CONTROL

These are the step-by-step procedures a credit follows from initial contact to final repayment, they are
important to keep our quality and consistency high. For instance they ensure we take prompt corrective action
on delinquent credits.

The following are critical administration functions:

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 8.2 DOCUMENTATION/CREDIT FILES:

8.3 Legal Documentation

Following the approval of credit requests, great care must be taken over the documentation between client
and Bank. Correct documentation preserves our legal rights, which the Bank may have to use against a client
during adverse conditions.

It is essential for the Bank’s Legal Department/Legal Counsel to circulate appropriate formats credit
documentation and they should review documents prepared by a client, another bank, group or party outside
the bank, which are submitted as part of the credit documentation requirement. For all external
documentations, the legal department must sign-off as evidence that text presented is acceptable to the
bank in terms of security.

Disbursement under a facility should not be effected until all the documentation is lodged in acceptable form
with the Bank using the Conditions Precedent To Draw down Confirmation Checklist (CCC form). On the
other hand, requests for disbursements against incomplete documentation should be presented using the
waiver/deferral format.

All credits disbursed where documentation was not complete should be reported to MCC for noting,
ratification, and recording.

8.4 Credit risk records

8.5 Credit Files

The Bank’s policy requires that credit files contain sufficient information for a user to get a full and complete
understanding of the relationship.

Credit files shall be maintained for all borrowers. The file shall be updated no less than once a year and more
often when the officer has information which would dictate otherwise. Applications for credit are to be taken
and retained in the credit files of the bank whether the credit is granted or rejected. A good credit file must
contain the following;

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 1. A complete description of the borrower, the loan, and the loan terms

2. Application for credit (required for all consumer loans)

3. Credit agency/bureau reports and all investigations

4. All other information required to perform pre-approval risk analysis. This includes but is not limited to
financial, trends, and ratios.(this requirement those not apply to instruments that are fully guaranteed
or insured as to principal and interest by the federal government.)

5. Written summary of the pre-approval risk analysis

6. Properly completed and initialed document review checklist

7. Copies of loan document, including but not limited to the promissory note, the security agreement,
and the financial statement.

8. All financial statements and other financial information received since the loan was approved.

9. Copies of any correspondence related to that loan.

10. Copies of any committee meeting minutes related to the approval, modification, or retention of that
security

11. Copies of credit risk reviews

12. Periodic officer memos detailing the results of meetings and telephone calls regarding the status of
the company, the management, and/or the credit relationship.

13. Memoranda on premises visits, collateral inspections, appraisal of management, and financial analysis
comments and other pertinent data.

8.6 Reports

The Board of Directors believes that an essential requirement for adequate credit risk monitoring is a
thorough system of management reports. This bank is expected to maintain accurate and comprehensive
management information system including but not limited to reports of credit risk exposures, changes in credit
risk exposures, and credit risk management activities.
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 8.7 Daily Reports

The following reports will be generated and reviewed only on the days when an activity or event covered by
the report occurs:

1. A report of new loans approved or re-approved. This report will identify each borrower; the type,
amount, and nature of the credit extension; compliance with approval policy requirements; and the
name of the approving officer or loan committee.

2. A report of new counterparties approved or re-approved. This report will identify each counter-party,
the nature of the approved activity, compliance with pre-approval policy requirements, and the name
of the approving officer or committee.

3. A report of Excess above limit. This report will show the amount of approval lines of credit, the
amount of outstanding borrowings, the amount over line, the date at which the over line situation
commenced and the name of the approving credit officer or credit committee.

4. A report of unapproved overdrawn accounts. This report must show overdrawn date, tellers name,
approving officer name, reason why the accounts was overdrawn etc.

8.8 Monthly Reports

1. A report of new loans approved or re-approved in the prior month. This report will identify each
borrower; the type, amount, and nature of the credit extension; compliance with approval policy
requirements; and the name of the approving officer or loan committee. This report will be submitted
to and reviewed by the management and board Credit Committee.

2. A report of new counterparties approved or re-approved in the prior month. This report will identify
each counter-party nature of the approved activity, compliance with pre-approval policy requirements
and the name of the approving officer or committee. This report will be submitted to and reviewed by
the management and board Credit and Investment Committee.

4. A summary report of total credit risk exposures shall be provided to the CRO, Management and
Board Risk Policy as well as Credit Committee. This report shall include the total amounts of credit
risk exposures by type and information indicating compliance with industry, size, and other
diversification requirements set forth in this policy and performance in accordance to the terms of the
facilities.

5. More specific portfolio reports in the following areas will also be generated:
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  Total Bank Credit Report
 Portfolio Distribution by Facility Type
 Portfolio Distribution by Business Units
 Portfolio Distribution by Standard Industry Codes (SIC)
 Portfolio Distribution by Ratings
 Portfolio Distribution by Collateral type
 Portfolio Distribution by Geographical Location
 Non performing Loans Distribution by Industry
 Non Performing Loans Ratings
 Major Recoveries from Classified Accounts
 Major Newly Classified Accounts
 Report on Bonds & Guarantees
 Large exposure reports
 Portfolio performance Vs Target
 Portfolio risk/return reports
 Risk Migration reports
 Accounts Turnover reports

6. A credit watch list report, conforming to the requirements set forth in the Potential High Risk and High
Risk Asset section of this policy, will be submitted to and reviewed by the Credit Committee and the
management and board Risk Committee.

7. Individual reports of required annual credit risk re-evaluations for investments, loans, and counterparties
that were conducted during the prior month. These shall be reviewed by the bank’s Chief Credit Officer and
by the Credit Committee.

8. Summary reports of required annual credit risk re-evaluations for investments, loans, and counterparties
that were conducted during the prior month. These reports shall be reviewed by the bank’s Chief Credit
Officer to ensure that each annual review is done as required.

9. Individual reports for all Credit Monitoring performed during the prior calendar month shall be provided to
the Credit Committee. These include the monthly, quarterly, and annual credit reviews of credit watch list as
well as the credit reviews of selected non-watch list credit exposures.

10. A monthly summary report of credit monitoring activity. This report should summarize the number and
type of credit risk reviews conducted during the prior month and year-to-date. The report should be reviewed

41 | P a g e C O N S U M E R C R E D I T P O L I C Y M A N U A L Revised 29/7/2015
by the bank’s Chief Credit Officer to assess whether credit review is performing enough reviews each month
to meet various monthly, quarterly, and annual review requirements set forth in this policy.

11. A report of all violations of the Credit Risk Management Policy, if any, shall be submitted to the
Management and Board credit Committees.

8.9 Quarterly Reports

Passport

1. A report of Total Bank Credit

2. Portfolio Disbursement by facility type

3. Large exposure report

8.10 Annual Reports

1) The bank’s internal auditor shall provide the board with a report assessing compliance with all
provisions in this policy. If the auditor finds any compliance problems or weaknesses, the audit report
shall include recommendations for corrective actions.

2) At least once a year, bank’s internal auditor shall test the accuracy of the
credit risk information reported to management, committees, and the Board of Directors. Any
material errors or omissions shall be fully reported to the Board of Directors at its next regularly scheduled
meeting.

9.0 CREDIT DOCUMENTATIONS

GUARANTOR FORM

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To
The Manager
Consumer Microfinance Bank
……………………..Branch

Sir / Madam,
Sub: - ……………………………………………………………………………………………………………………. /
Loan for N…………………………………….
(Name of the Applicant/s)
I understand that the above named applicant/s has/have applied to you for a loan of the above stated amount
and as guarantor of the above stated loan I furnish you under my signature the necessary information
regarding myself
Names: ………………………………………………………………………………………………………………………
…………………………………………………
(Surname) (Other names) (Title)
Sex: ………………….. Marital Status: ……………………………………... State of
Origin: …………………………………………………..

Years of Working Experience: …………………… Years with Current

Employer: …………………………………………………………………..

Employer: ………………………………………………….………………….……………………………………………
……………………………………………………

BVN
Number: ………………………………………………….………………….………………………………………………
…………………………………………

Office
Address:……………………………………………………………….……………………………………………………
…………………………………………

Tel.# (Day):……………..……………………………………..Mobile Tel

#………………………………………………………..................................

E-
Mail:…………………………………………………………………………………………….Department:……………….
……………………………………………

Grade/Level:……………….…………………….(e.g. Asst Mgr)

Position:…………………………………………………………..(e.g. Head, Ops)

Home
Address:………………………………………………………………………………….…………………………………
………………………………………

……………………………………………………………………Tel.#
(Other): ……………..…………………………………………………………………….
DECLARATION

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 I declare that all particulars and information given in the above form are true, correct and complete and that
they shall form the basis of loan to be availed from Consumer Microfinance Bank.
I confirm that I have had no insolvency proceedings against me nor have I ever been adjudicated / insolvent. I
further agree as guarantor of the above stated loan if sanctioned shall be governed by the rules of Consumer
Microfinance Bank which may be in force from time to time.
Guarantor’s Oath
I, …………………………………………………………….………………………………………………………..of the
above information hereby guarantees that
Mr…..………………………………………………………………………………………………….of…………………..
……………………………………………………...
……………. …………………………………………………whom I have known for ………………………….....shall
liquidate the loan/facility of
N……………………………………….(…………………....................…………………….……………………………
…………………………………………………..)
(Amount in words) granted to him on the …………………………………., day
of ………………………………………………, year …………….

I irrevocably undertake to REPAY to Consumer Microfinance Bank Limited, the value of the loan/facility on
any form of indebtedness and other associated cost of debt recovery/charges on behalf of the above
mentioned Applicant if he/she fails to repay the loan/facility on or before the due date
of …………………………………………………………………………………….
I attest to the fact that I am duly informed and privy to this transaction between Consumer Microfinance
Bank Limited and ………………………………………………………………….……. (the Applicant)
I also agreed to the confiscation of my personal belongings that may worth the degree of the indebtedness of
the obligor if the tenor of the loan expires whilst whole or part of the loan amount remains.

Attached to this form is the photocopy of my valid Identity card

Signature ………………………………………………………………………………………..Date:……………………
…..........................................

GUARANTOR’S AGREEMENT
THIS GUARANTOR'S AGREEMENT, between the Consumer Microfinance Bank Limited ("the Bank"), and
_______________________(“Guarantor”), regarding a loan to _________________________________________ (“the
Obligor”).
WHEREAS,

That the Obligor, ______________________________________________whose current address is

_________________________________________________________, has applied for a loan in the amount of
N_____________ from the Bank ("the loan") with the intention of using the loan to finance
______________________________________________;

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 That the loan cannot be granted unless it is guaranteed by a qualified guarantor;

NOW, WHEREFORE, IT IS AGREED,

FIRST: Guarantor guarantees the Obligor’s payment of the loan in the amount of
N_______________________, as well as any and all interest and penalties owed in accordance with the terms of
the loan agreement signed by the Obligor covering the loan ("the Loan Agreement").

SECOND: Guarantor shall take all reasonable measures to assure that the Obligor repays the loan in
accordance with the terms of the Loan Agreement and to cooperate with the Bank in collecting past-due loan
payments, together with any interest and penalties accrued under the terms of the loan Agreement.

THIRD: That if the Obligor defaults on the loan agreement with the Bank, Guarantor shall pay the Bank, the
outstanding balance of the aforesaid loan, together with any interest and penalties accrued under the terms of
the loan, within seven days of receiving written notice of the Obligor's default.

FOURTH: Notwithstanding the modification of the loan agreement so as to extend the repayment periods
or so as to increase or decrease the amount of periodic payments, Guarantor shall remain bound by the
obligations set out in this Guarantor's Agreement.

FIFTH: If the Obligor defaults on the loan payments, and if Guarantor fails to pay the outstanding balance
of the aforesaid loan together with any interest and penalties accrued under the terms of the loan as required
under Article THIRD above, Guarantor shall submit to the jurisdiction of the courts and other pertinent
authorities in Guarantor's area of residence and in Abuja, and Guarantor hereby waives all challenges to the
jurisdiction of those courts and pertinent authorities in relation to all legal process and other legal action that
may be deemed necessary by the Bank or its representative for the collection of monies owed on account of
the breach of this Guarantor's Agreement. Guarantor also agrees to pay the Bank all reasonable legal fees,
expenses, and court costs incurred by the Bank in collecting amounts owed under this Guarantor's Agreement.

SIXTH: Guarantor's obligations under the foregoing paragraphs are subject to the grant of the loan to the
Obligor.

SEVENTH: Guarantor hereby authorizes the Bank to request Guarantor's credit report from the credit
bureau, as needed, and shall sign all documents required for making those inquiries.

IN WITNESS WHEREOF, Guarantor and the duly appointed representative of the Bank hereby subscribe to
this Guarantor's Agreement on the dates indicated below.

_____________________________________ _________________________________________
The Guarantor Date Authorized Signatory Date
For: Consumer Microfinance Bank Limited

Subscribed before me by the Guarantor, _____________________________________________, on this

___ day of ___________________________, 20_______________________

_________________________________________________
Notary Public

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 SME LOAN PRODUCT PROGRAM

APPROVAL FORM

1. BORROWER:

2. BUSINESS ADDRS:

3. ACCOUNT NO:

4. BVN NUMBER:

5. ACCOUNT BALANCE:

6. OCCUPATION (specify):/MDA

7. FACILITY REQUIRED:

8. FACILITY AMOUNT: TENOR :

9. INTEREST RATE: INTEREST CHARGE:

10. REPAYMENT TERMS:

11. FACILITY FEE:

12. PURPOSE:

13. REPAYMENT SOURCE:

14. REPAYMENT FREQUENCY:

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 15. COLLATERAL:

RISK

ACCEPTANC

E CRITERIA

Please tick (√) the “Yes” or “No” column as appropriate.

SN PARAMETER YES NO

1 Has applicant been in account relationship with Consumer MFB for at least 3
months?

2 Has account had no history of default loan in the last 6 months?

3 Is collateral in place?

4 Is guarantor six months statement of account in place?

5 Has the customer been informed of the daily cash collection policy and is
repayment within his cashflow?

6 Do we have the rent receipt of the customer with at least 6 months before
expiration?

7 Is physical visitation report in place and duly signed by both the account officer
and credit officer?

8 Has the guarantor form been filled, verified and do we have the guarantor
cheque?

Name Signature Date

Account Officer:

Credit Officer:

MGR/MD/MCC/BCC:

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Verified by (ICO):

CIVIL SERVANTS LOAN PRODUCT PROGRAM

APPROVAL FORM

1. BORROWER:

2. ACCOUNT NO:

3. BVN NUMBER:

4. AVERAGE MONTHLY SALARY:

5. ACCOUNT BALANCE:

6. OUTSTANDING LOAN

7. MINISTRY/AGENCY:

8. FACILITY REQUIRED:

9. FACILITY AMOUNT:

10. TENOR:

11. INTEREST RATE :

12. INTEREST CHARGE:

13. MONTHLY REPAYMENT:

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RISK ACCEPTANCE CRITERIA

Please tick (√) the “Yes” or “No” column as appropriate.

SN PARAMETER YES NO

1 Has applicant been in account relationship with Consumer MFB for at

least 3 months?

2 Has account had no history of default loan in the last 6 months?

3 Is the Ministry/Agency on Consumer MFB Salary Domiciliation?

4 Has the Customer salary been regular in the last three months?

5 Is the repayment within a maximum of 75% of the lowest monthly salary in

the last 3 months?

6 Does the customer have a covering Letter from the ministry or Agency?

Has The genuineness of the letter been verified by authorize staff.

7 Is the loan tenure adequately covered by the period stated in the letter?

Name Signature Date

Account Officer

Credit Officer:

Approved by:

Verified by (ICO):

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 HIRE PURCHASE FORM

NAME OF
APPLICANT…………………………………………………………………………………………………………………
………………

OFFICE
ADDRESS……………………………………………………………………………………………………………………
………………….

TEL…………………………………..MOBILE………………………………………………………………………………
…………………………..

ACCOUNT
NO: ……………………………………………………………………………………………………………………………
…………….

BVN
NUMBER:……………………………………………………………………………………………………………………
…………………….

IPPIS
NO:……………………………………………………………………………………………………………………………
……………………

APPLICANT
SIGNATURE:…………………………………………………………………………………………………………………
………

DEPARTMENT IN
ORGANIZATION…………………………………………………………………………………………………………..

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POSITION
HELD…………………………………………………………………………………………………………………………
…………..

RESIDENTIAL
ADDRESS……………………………………………………………………………………………………………………
…….

ASSET
REQUIRED……………………………………………………………………………………………………………………
……………..

PRICE
(N)……………………………………………………………………………………………………………………………
………………..

PAYBACK
PERIOD………………………………………………………………………………………………………………………
………..

INSTALMENTAL
AMOUNT………………………………………………………………………………………………………………..

MEANS OF
IDENTIFICATION……………………………………………………………………………………………………………..

POST-DATED CHEQUE(S)
NO…………………………………………………………………………………………………………….

DECLARATION:I ……………………………………….......DO HEREBY AGREE TO ABIDE BY THE TERMS AND

CONDITIONS OF THE TRANSACTION AS STATED ABOVE,THAT IF FOR ANY REASON A DEFAULT,MY

GUARANTOR SHOULD BE HELD RESPONSIBLE FOR THE REPAYMENT OF THE ASSET(S) HIRED TO ME

SIGNATURE(applicant)……………………………………………………..DATE………………………………………
……………

GUARANTOR’S
NAME……………………………………………………………………………………………………………………

ADDRESS……………………………………………………………………………………………………………………
……………………

OCCUPATION………………………………………………………………………………………………………………
………………

PHONE
NO…………………………………………………SIGN……………………………………………………………………
……
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UNDERTAKEN:I ……………………………………………HAVEN GONE THROUGH

THE TERMS AND CONDITIONS AS STATED FOR THE ABOVE ASET(S) GRANTED TO MR/MRS

……………………………………………………..TO THE TUNE OF N ....................I HEREBY UNDERTAKE

TO BEAR FULL RESPONSIBILITY OF THIS ASSET(S) IN CASE OF ANY DEFAULT

TERMS AND CONDITIONS

ACCOUNT OPENING FEE N2, 000.00

1. CUSTOMER INDICATES ITEM(S) TO BE PURCHASED
2. DESK OFFICER CONFIRMS THE PRICE AND ADVICE THE CUSTOMER
3. CUSTOMER UPON ACCEPTANCE CONTRIBUTE 20% DOWN PAYMENT
4. INTEREST RATE=6% per month
5. TENURE =6 MONTHS
6. THE BANK PURCHASES THE ITEM(S),MAKE NECESSARY DOCUMENTATION

AND DELIVERS THE ITEM(S) TO CUSTOMER

7. ITEM(S) IS/ARE ONE YEAR GUARANTEE

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 SME LOAN/OVERDRAFT REQUEST FORM

Date: / /2015

LENDER: CONSUMER MICROFINANCE BANK LIMITED

APPLICATION FEE: N1,000

ACCOUNT
NAME: ………………………………………………………………………………………………………………………
…..

ADDRESS: …………………………………………………………………………………………………………………
……………………

ACCOUNT
NUMBER: ……………………………………………………………………………………………………………………
…

BANK VERIFICATION
NUMBER: ………………………………………………………………………………………………………

AMOUNT: ……………………………………………………………………………………………………………………
…………………

INTEREST
CHARGED: …………………………………………………………………………………………………………………
…….

FACILITY FORM
FEE: ……………………………………………………………………………………………………………………….

TENOR: ………………………………………………………………………………………………………………………
………………….

PURPOSE: …………………………………………………………………………………………………………………
……………………

REPAYMENT
SOURCE: …………………………………………………………………………………………………………………..

COLLATERAL: ……………………………………………………………………………………………………………
……………………

Note: The bank will be obliged to communicate you in writing, one week after the expiration of the
tenor of your facility. Two weeks afterwards, the bank will visit and take possession of any
good(s) …………………………………………………………………………………………………………………….
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that may worth the value of your account outstanding and subsequently sell off same to regularize
your account.

UNDERTAKING:
I, …………………………………………………………………….. hereby agree to the condition governing the
grant of this facility as stated above. I also agreed to the confiscation of my personal belongings that
may worth the degree of my account indebtedness if the tenor of the facility expires whilst whole or
part of the facility amount remains.
CUSTOMER
SIGNATURE: ………………………………………………………………………………………………………………
…

CUSTOMER’S RESIDENTIAL
ADDRESS: …………………………………………………………………………………………….

GUARANTORS NAME &

SIGNATURE: ………………………………………………………………………………………………

OCCUPATION &
ADDRESS: ………………………………………………………………………………………………………………

FOR BANK USE.

ACCOUNT OFFICER

10.0 ADENDUM TO CREDIT POLICIES

TYPES OF CONSUMER LOAN

i. Group lending
ii. Hire Purchase loan
iii. Individual loan
iv. MSME Loan
v. Salary Advance

10.1 GROUP LENDING: This category of lending is targeted to meet the financial needs of small
business men and women who are already in business, whose business are limited by insufficient
fund to run the business effectively and who lacks collateral to guarantee such loan. The members
choose a convenient meeting place for weekly meetings (days of repayment). All members must be in
attendance

CHARACTERISTICS OF GROUP LENDING

i. Minimum membership of fifteen (10)

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 ii. An amount of thirty thousand naira (#30,000.00) for each member for a start.
iii. COLLATERAL SECURITY:
 Group guarantee. This simply means the default of one member is the default of all.
 Each member must have a personal guarantor who shall be non member of the group. The
personal guarantor must either be a civil servant and provide his work ID as part of the KYC
requirement or a Business/ Artisan who must have a permanent place of business and/or
Residence, If rented, must have paid for the Place for one year with expiration period not
later than four months from date of maturity of the loan and must provide satisfactory
evidence of payment.
 A mandatory savings of 10% of the amount requested must be deposited by the customers
before disbursement. This shall not be withdrawn by any member until all members
complete their repayments.
 Each member is expected to have a minimum forced savings of 1% of loan granted on
each days of repayment (or 5% weekly).
NOTE: Both the mandatory weekly savings remains the customer’s money but can only be
withdrawn at the end of all members’ repayments. This will help the bank to raise her
deposit level. Moreover, in the event of default of any member at the expiration of the loan,
the amount defaulted shall be deducted from the group members saving. Please note that
default shall not be tolerated. Therefore, the credit officer at the repayment day, must
ensure that the total sum repayable for that week is collected wholly.
iv. All members place of business or residence must be located within the same vicinity and
verified by both the CSO and the Head of Credit.
v. Duration of loan: Three months
vi. Repayment Plan: Weekly
vii. Moratorium: One (1) week
viii. TRIBE: Group members should be people of different tribe.
ix. Members must know each other as a result of being located close to each other either by
business or residence. And individual interview should be conducted by both the CRO and HC
independently.
x. In the event where we have large numbers of people and any outstanding member wants a
higher loan than that of other members, such member is permitted to create a new group
made up of people of likeminded.

10.1.1 THE GROUP LEADER:

Every group will be headed by a leader and a secretary. These two shall have a sufficient KYC. The leader
shall provide two credible and responsible guarantors. The two must be people who can enforce defaulting
members to pay or mobilize others to pay the defaulted amount.

RESPONSIBILITIES OF CUSTOMERS RELATION OFFICERS

i. Sourcing of responsible active poor customers
ii. Organise, educate and harmonise the group members as one.

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 iii. Ensure he/she sights the business location/shop or place of [Link] address of such should
be confirmed through the KYC documents e.g, rent receipts, Electricity bill etc provided by the
customers.
iv. He/she must ensure that all KYC documents are intact.
v. He shall ensure strict monitoring of repayment of all credits granted via him and enforce payment of
default not later than 48 hours from the due date. Otherwise he shall be liable for the amount
defaulted and that will be deducted from his staff account within 48 hours.

10.1.2 ROLES OF THE HEAD OF CREDIT IN RESPECT TO GROUP LENDING POLICY OF THE BANK

i. The group formed by the customer relation officers must be inspected, accessed and evaluated by
him / her before initial disbursement.
ii. Any group members suspected by him/her must not be approved.
iii. He must double verify every member and guarantor address and sign off.
iv. He must ensure that all KYC document for both the members and the guarantors are in place and
verified. This include rent receipt, address verification, estimated business value, Post dated
cheques and statement of account where applicable.
HIRE PURCHASE LOAN
This can be referred to as asset acquisition loan. This is a situation where the bank undertakes to
buy or acquire asset on customers demand. Such equipment e.g, refrigerator, furniture, washing
machine, generating set, electronics, digital camera for photographers etc. after the customer has
met all requirement from the bank. Such asset is bought in the name of the bank and remains the
bank property until the final installment is paid.

Characteristics – For customers whose salaries are domiciled with Consumer MFB
I. Duration: 6 months.
II. Salary customers makes 20% deposit
III. Interest rate: 6% per month
IV. Repayment plan: monthly.
V. Collateral Security:
 The customer shall provide a guarantor who must be a civil servant of reputable character.
 The monthly salary of such guarantor must be able to accommodate the monthly
repayment.
 The guarantor must provide all necessary KYC documents
 The items are bought in the name of the bank which guarantees the bank to take
ownership of such goods.
 Post dated guarantors cheque must be provided
 The goods must be insured comprehensively with the bank as first lost payee – the
insurance premium must be charge to customer.

10.1.3 NON SALARY CUSTOMERS

i. Duration: 3 months
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 ii. Repayment plan: Monthly
iii. Collateral Security:
 Customers must make a mandatory deposit of 50% of the sales price of such items.
 Guarantors must present postdated cheque
 The guarantor must provide all necessary KYC documents
 The items are bought in the name of the bank which guarantees the bank to take
ownership of such goods.

10.1.4 REQUIREMENT FOR HIRE PURCHASE LOAN

SALARY CUSTOMERS NON SALARY CUSTOMERS

1. Salary must be domiciled with the bank - Must have a viable business. Such
business must be able to generate daily
income.
2. Such salary account must have had a -
minimum salary inflow of 3 months

3. The customer shall provide at least a - The customer shall provide at least 2
guarantor for such loan. Such guarantor guarantors for such loan. Such guarantor
must be a civil servant, a banker or any must be civil servant, a banker or persons
person from a reputable organization. A from a reputable organization. A guarantor
guarantor in this category shall not be a in this category shall not be a lawyer,
lawyer, policeman/women etc. policeman/women etc. The guarantors
shall provide post dated cheque to back
up the loan.
4. Such customer must have a mandatory - Such customer must have a mandatory
deposit of 20% of the goods sales price. deposit of 50% of the goods sales price.
5. All KYC document must be in place - All KYC documents of both the guarantors
and the customer must be in place.

6. The monthly salary of the customer must

be able to repay the loan within agreed
duration.

10.2.0 MSME LOAN

i. The customer must have a viable business.

ii. Such business must have a permanent location. That is a rented shop which must have been paid
for. The business can also be situated in the permanent place of residence of the customers.
iii. Collateral security:
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 a. Two suitable guarantors who must be civil servants whose salary can repay an amount granted
to the customer in the event of default. Such guarantor must present the last two months pay
slip. However, guarantors to this facility can also be business person who must have a suitable
business that worth higher than the loan requested. Such a guarantor must also have a
permanent place of residence accessible to the bank.
b. A mandatory deposit of 10% of the amount requested must be provided by the customer.
c. Guarantors post-dated cheque
d. Stock count form must be filled and signed off.
iv. DURATION: 3 months
v. Repayment plan: Daily of amount equal to the principal/25 + 50% of the result.
vi. AMOUNT: This depends on the worth of the business as inspected by the Head of credit.

10.3.0 SALARY ADVANCE

i. Customers in this category must have their salary account domiciled with bank.
ii. There must have been a regular flow of the customer’s salary for minimum of 3 months.
iii. Duration: 1 to 6 months.
iv. Security: Salary account domiciled with the bank.

RESPONSIBILITIES OF CUSTOMERS RELATION OFFICERS IN ALL FACILITY CASES

i. Sourcing of responsible customers
ii. Ensure he/she sights the business location/shop or place of residence. The address of such should
be confirmed through the KYC documents e.g, rent receipts, Electricity bill etc provided by the
customers.
iii. He/she must ensure that all KYC documents are intact.
iv. He shall ensure strict monitoring of repayment of all credits granted via him and enforce payment of
default not later than 48 hours from the due date. Otherwise he shall be liable for the amount
defaulted and that will be deducted from his staff account within 48 hours.

ROLES OF THE HEAD OF CREDIT IN RESPECT TO ALL LENDING POLICY OF THE BANK

v. The borrowing customer must be inspected, accessed and evaluated by him / her before initial
disbursement.
vi. Any customer listed in the bank black list or suspected by him/her must not be approved.
vii. He must double verify every customer and guarantor address and sign off.
viii. He must ensure that all KYC document for both the customers and the guarantors are in place and
verified. This include rent receipt, address verification, estimated business value, Post dated
cheques and statement of account where applicable.
ix. He must maintain list of defaulting customers and update the banks black list on a regular basis

58 | P a g e C O N S U M E R C R E D I T P O L I C Y M A N U A L Revised 29/7/2015
59 | P a g e C O N S U M E R C R E D I T P O L I C Y M A N U A L Revised 29/7/2015