Financial Institution Eligibility Criteria |
|
Loan Portfolio Size |
Min- USh 500M |
Minimum Equity |
USh 500M |
Agribusiness Loan Portfolio Size |
On lending to agribusinesses and green investments |
Leverage: |
<300% |
Number of Members (for SACCOs) |
>1000 |
PAR |
<10% |
Years in existence (with audited accounts) |
>3 |
Other Considerations. |
Compliant to all regulatory entities e.g URA, NSSF Willingness to have a Social Performance Management (SPM) assessment conducted on the Financial Institution with the view of improving sustainable financing therein. |
| Lines of Credit Terms | |
| Total Amount: | Min- USh 500M Max- Up to 100% of the Bank’s Equity |
| Loan Utilization: | On lending to agribusinesses and green investments |
| Interest Rate: | Annualized 182 T-Bill rate+ risk margin (max. 2%) |
| Other Costs: | No processing fees Stamp duty, cost of document registration and lawyer’s fees to be paid directly to lawyers by the borrower. |
| Tenure: | Up to 10 years |
| Grace Period: | Up to 12 months on principal repayments only – Reducing Balance |
| Disbursement Modalities: | Bullet or tranched |
| Repayment Method: | Quarterly repayments (Interest repayments start immediately) |
| Collateral: | Any of the following (alone or bundled depending on risk assessment) Debenture on performing portfolio encumbered up to 120% of borrowing (Commonest) Letter of comfort by ASA International (ASAI) Corporate guarantee Landed property |
| Other benefits | Business Development Services at concessional rates if needed |
| Other conditions | Targets – pre- defined minimum number of loans Gender – Pre-defined number of loans to women Willingness to have a Social Performance Management (SPM) Assessment conducted on the Financial Institution with the view of improving sustainable financing. Quarterly reporting |
| Guarantees Terms | |
| Limit | Not limited – Current practice is not more than a third of the Financial Institution’s agribusiness portfolio. |
| Purpose | For on-lending to agriculture or green interventions |
| Risk Ratio | 50:50 (Negotiable depending on risk being covered) |
| Guarantee Fess | Up to 1% p.a. |
| Other benefits | Business Development Services at concessional rates if needed |
| Other conditions |
|
