PRODUCT PROGRAM SUMMARY

PRODUCT Medium Term Loan

BUSINESS UNIT ALL
PRODUCT DESCRIPTION It offers Medium Term loans to school and Some Universities which need Financial
support for their expansion
TARGET MARKET Private Universities, Private Secondary Schools
GLOBAL LIMIT Five (05) Billion FCFA
OBLIGOR LIMIT Twenty (20) Million FCFA
TENOR 48 months
SECURITY School Fees under dual management, Personal guarantee of promoter, Promissory
note
REPAYMENT Revenue from School Fees and others revenue

MEDIUM TERM LOAN

Introduction

Improving on our liquidity is key at this point in time and going forward. One of our principal Asset Products and the highest
income stream is BTP. It is equally the highest risk of the bank in terms of Credit and Liquidity risk. The aim of this product
program is to develop a financial mechanism which enhances the bank’s ability to engage in small and medium scale lending
through well-defined processes and procedures on a short term bases. It is aimed at improving the bank’s liquidity strength as
well as the credit process through a well-defined and harmonized credit process.

PRODUCT DESCRIPTION

The credit product involves the provision of medium term financing of up to a maximum tenor of 48 months to NFC Bank
customers engaged in the sector of Education like Private Universities and Secondary Schools.

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UNIQUE BENEFITS

The following are the unique benefits to be derived from the product:

- Product will enable NFC Bank provide working capital financing to a certain category of client in a secured manner
while minimizing the repayment risk.
- Proceeds from school fees will be rooted through the bank. It will enhance the bank’s deposit mobilization efforts at no
costs.
- The product will ensure fast response to customers’ credit need and improve the turnaround time. This will improve
the competitiveness of NFC Bank in an increasingly competitive banking industry.
- The medium term nature of the product will improve the bank’s income generation.
- It will increase our clientele base, improve cross selling of other banking products

PRICING

As per NFC Bank banking terms and conditions

 Interest Rate: 10% p.a tax exclusive

 File opening fee:

Amount ≤ 05M Amount ≤ 10M Amount ≥ 10M

XAF 25000 XAF 50000 XAF 100000
 Processing fee 01% on approved amount VAT exclusive

SCREENING PARAMETRES

The following are the primary parameters that will be used to screen all applications/request before they qualify for the
bank’s review

 Obligor must not be in doubtful status in any of the Financial Institutions in CEMAC and Cameroon in particular
 Obligor must not be of poor reputation
 Obligor must not have a history of bounce checks of up to thrice

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  Obligor must not be a start-up
 Obligor should have had a business experience for at least 02 years

RISK ACCEPTANCE CRITERIA (RAC)

 Applicant must be a customer of NFC Bank for a minimum period of 3months

 Facility amount per transaction must not exceed 20 million
 Tenor is a maximum of 48 months
 Minimum value of stock and stock turnover per annum 05 million and 20 million respectively

SECURITY /SUPPORT

 Domiciliation and assignment of school fees proceed

 School Fees under dual management
 Promissory note dully signed by the authorized person
 Personal guarantee of the promoter or promoters

REQUIRED DOCUMENTATION

 Customer’s application
 Bill of lading for cases of imported goods pending clearing
 Inventory of stock and value
 List of main buyers and debtors
 Account Statement with other banks and micro Financial Institutions
 Updated tax documents

CREDIT RISK
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- Possibility of diversion of funds: Client in this line of business could easily use facility for unintended purposes thereby
narrowing the chances of full repayment.

- Risk of diversion of school fees proceeds: There is the possibility of diverting all or some of the school fees
proceeds due to the absence of control over daily deposits.

- Poor governance structure as most of such businesses are sole proprietorship kind of business. Decision making rest
on a single person and error prawn

- High continuity risk.

- Absence of a secondary fall back

- Stiff competition and high cost of funds

CREDIT INITIATION APPROVAL PROCESS

The process will follow the bank’s credit process flow as stated in the credit process flow policy.

PUTTING IN PLACE OF THE FACILITY

Putting in place of a facility by the Central Processing Unit after approval by the competent authority, will be subject to the
following criteria:

 A signed acceptance/notification letter by the client

 A signed Loan convention or MOU by the required person or persons
 A signed disbursement letter by the DCM

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DISBURSEMENT

Disbursement is condition to the fulfillment of the terms and conditions stated on the offer letter. Facility could disbursed
from any of our business units but in collaboration with the account or business manager of the host branch Client can only
consumed the facility from any of our business units based on the acceptable terms and conditions as spelled out on the offer
letter.

FILING

The original credit file shall be under the control of the Head Office Credit Department and a copy with the business office
concern.

MONITORING

NFC Bank’s ability to effectively monitor activities under this product program and identify any problem in a timely manner
will be a key success factor to the product program. This will be done by way of daily report through NFC Credit
Administration Unit. Relationship officers will have regular contact with the customers to ensure good monitoring of various
stages of the transaction.

DOCUMENTATION RISK:

The relationship officer will be primarily responsible for ensuring that the required documentations are provided by the
client. He shall work in collaboration with the FOREX unit to ascertain the authenticity of relating to port clearing and
declaration documents.

LOAN MONITORING RESPONSIBILITY:

ISSUES ACTION RESPONSIBILITY

Customer’s default
Give the customer a phone call 48hours or 2days Account relationship officer
of not doing a deposit
Visit customer with a week of not carrying out a RO, RM, BM
deposit in account
Prepare a proposal of workout within a month of

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 default
Recover facility with 3 months of default RO ,RM, BM, Recovery
Follow the classification process in case of non- RO, RM, BM, Credit Admin
recovery (see credit policy manual)
OPERATIONAL RISK ISSUES

RISK EXPOSURE CONTROL RESPONSIBILITY

Diversion of sales -Continuous follow up on daily, weekly deposit made RO, RM, BM
(call customer’s attention when a drop in deposits is
noticed)
-Update on available stock of goods at the shop and
warehouse
Periodic payments -System automated for fees, charges, commission Operations
-Monthly income tracking and compares with budgeted Finance
-Independent periodic review of income of the product Credit monitoring officer
group

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BASIC INFORMATION REPORT

ACCOUNT NAME------------------------------------------------------------------------------------------------

ACCOUNT NUMBER---------------------------------------------------------------------------------------------

DATE OF ACCOUNT OPEN -----------------------------------------------------------------------------------

NAME OF PROMOTER------------------------------------------------------------------------------------------

AMOUNT REQUESTED-------------------------------------------------------------------------------------------

PURPOSE------------------------------------------------------------------------------------------------------------

CUSTOMER’S ENGAGEMENT---------------------------------------------------------------------------------

 Direct--------------------------------------------------------------------------------------------------------

 Indirect-----------------------------------------------------------------------------------------------------

BRANCH RECOMMENDED AMOUNT ---------------------------------------------------------------------------

REPAYMENT SOURCE-------------------------------------------------------------------------------------------------

TENOR---------------------------------------------------------------------------------------------------------------

PRICING---------------------------------------------------------------------------------------------------------------------

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GUARANTEE? YES----------------------------------------------- NO-------------------------------------------

TYPE AND VALUE-----------------------------------------------------------------------------------------------

INSCRIPTION STATUS--------------------------------------------------------------------------------------------

I RISK ACCEPTANCE CRITERIA

Please fill in “Yes” or “No” as appropriate.

SN PARAMETER YES NO

1 Has applicant been a customer of NFC Bank for a minimum of 3

months?
2 Is applicant’s (line of business) within the NFC pre-approved list?
3 Has pre-approved documentation been obtained?

4 Has documentations been confirmed to be authentic

5 Is facility amount per transaction within obligor limit

7 What is this supposed to mean?

Relationship Officer------------------------------------------ ---------------------- -------------------

Name Signature Date

Branch Manager ------------------------------------------- -------------------- -------------------

Name Signature Date

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Regional Manager ------------------------------------------- -------------------- -------------------
Name Signature Date

Designated Credit Officer:

--------------------------------------------- ------------------- ------------------

Name Signature Date

-------------------------------------------- ------------------- -----------------

Name Signature Date

General Manager:

--------------------------------------------- ------------------- ------------------

Name Signature Date

AMOUNT APPROVED IN FIGURE & WORDS: ---------------------------------------------------------------------

REQUIRED DOCUMENTATION

Please fill in “Yes” or “No” as appropriate.

SN PARAMETER YES NO

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 1 Is customer’s application in place?

2 Is the copy of the confirmed bill of lading in place?

3 Has the Basic Information Report been completed?

4 Is there a Satisfactory Central Bank (Central de Risque) report on the

client?
5 Is there a copy of acknowledgement Delivery Receipt/Note?

APPROVAL GRID

As per the credit process flow.

If we are ok with the idea, then I propose we can further propose product programs for the folliwng line of business:

1. Schools
2. Hospitals
3. Pharmacies
4. Laboratories
5. Supermarkets
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6. Etc

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