Empowering traders and their trade
Type of Facility
Amount of Loan
Assessment of Working Capital
Loan to Value
Processing & Service Charges
Property to be Mortgaged
Security / Documentation
Overdraft / Loan
All persons engaged in trade of any commodity / goods not prohibited by law or not opposed to public interest. Individuals, Firms, Pvt. Ltd. Co; Proprietorship and partnership concerns engaged in trade, Registered Co-op. Societies are also eligible.
The credit facility may be considered for Traders who are established in their line of business preferably for 2 years.
Trading units established by our existing customers with satisfactory dealings, even if these are established for less than 2 years but more than 1 year.
For working capital requirements.
Need based requirement of funds for development of shop by way of loan up to a maximum of 25% of the limit sanctioned for working capital.
|Minimum||: UGX10,000,000/- (Ten Million)|
|Maximum||UGX 500,000,000/- (Five Hundred Million)|
- Advance value of collateral security or
- 20% of the projected annual sales subject to verification of proof of sales i.e. sales tax returns of previous year etc., Which ever is less.
- 10% on Bank’s own FDR.
- 40% on immovable property as per recent valuation report.
- Loan to Value (Exposure/ collateral security)
- Bank’s Own FDR: 0.90 (90.00%)
- Immovable Property: 0.60 (60.00%)
- Overdraft: 12 months subject to annual review.
- Loan: Maximum 48 months (depending on repayment capacity)
- For Overdraft and Loan: Age of property should not be more than 15 years old. However for properties, which are older than 15 years but not more than 20 years, branch is to ascertain structural soundness of the property by obtaining an approved engineer's certificate, certifying that structural soundness as well as residual life of the building should be at least 5 years more than the repayment period of the loan.
- For overdraft facility secured by immovable property
· Building less than 15 years old – guidelines applicable to general advances to be followed.
- Older than 15 years - the branch will be required to carry out inspection of the property every year at the time of review of facility and obtain structural soundness report from architect every 5th year along with valuation of property.
In case, any defect is observed during inspection of the security or in architect's report, branch will be required to ensure substitution of the security having requisite value immediately or ensure liquidation of the facility at the earliest but not later than 12 months period in any case.
Usual Documents as per extant Bank guidelines for Overdraft & Term Loans, however Branch to ensure:
- Personal Guarantee of 3rd party in case the immovable property charged to bank is in the name of 3rd party.
- Tangible collateral securities in the form of mortgage of land (not agricultural land) and buildings, our Bank’s FDRs. Valuation of property to be done by Bank’s approved valuer and valuation to be done once in 5 years.
- Property to be mortgaged must be in the name of either:
- Proprietor, Partner, Director
- Close relative of borrower who should stand as guarantor
Third party property provided credit facility is for UGX100 Million and above.
- Undertaking from the borrower exclusively to deal with our bank.
- Credit rating required as per extant guidelines, however pricing is delinked to Credit Rating.
- Branch to explore possibility of insurance of mortgaged property.
- Borrowers to route sales and all transaction through Overdraft / Current Account with the Bank.
- In case of Loan against FDR, if interest for one quarter is not serviced, FDR to be appropriated.
- Proof of annual sales by way of tax returns etc. to be obtained with application form, in case of units having sales of more than UGX150Mn.
- Branch may counsel their borrowers to have the stock insured in their own interest at their cost.
- Inspection of the property to be conducted once a year.
- Obtaining of Balance Sheet and P/L account is not compulsory. However, declarations of annual sales supported preferably by Returns / assessment on sales tax / income tax, etc. be obtained and kept on record at the time of annual review.
- Pre-sanction inspection is to be carried out and report to be kept on record.
- Valuation of immovable property offered as security is to be done by Bank / approved valuer. Valuation is to be done once in 5 years.
- Branch to endeavour to display Bank’s name as financier from publicity angle.
Simplified application form / appraisal note to be used.
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