Loan Policy

1. INTRODUCTION

This loan policy outlines the guidelines and procedures for extending credit facilities to customers of PROSPERITY MFB. It is designed to ensure prudent lending practices while promoting financial inclusion.

2. OBJECTIVES

• To establish clear lending criteria and procedures
• To maintain a quality loan portfolio
• To ensure compliance with regulatory requirements
• To promote responsible lending practices

3. LOAN TYPES

3.1 Business Loans

Loans provided to support business operations, expansion, and working capital needs.

3.2 Personal Loans

Credit facilities extended to individuals for personal needs and consumption.

3.3 Agricultural Loans

Specialized loans for farming activities and agricultural businesses.

4. ELIGIBILITY CRITERIA

4.1 General Requirements

• Valid identification documents
• Proof of income/business operation
• Good credit history
• Viable business plan (for business loans)

5. LOAN TERMS AND CONDITIONS

5.1 Loan Amounts

Loan amounts will be determined based on:

• Customer's repayment capacity
• Purpose of the loan
• Collateral value (where applicable)

5.2 Interest Rates

Interest rates will be:

• Competitive and market-driven
• Risk-based pricing
• Compliant with regulatory guidelines

6. LOAN PROCESSING

6.1 Application Process

1. Submission of loan application
2. Document verification
3. Credit assessment
4. Approval/Rejection decision
5. Disbursement

7. RISK MANAGEMENT

The bank shall maintain robust risk management practices including:

• Regular portfolio monitoring
• Periodic review of loan accounts
• Early warning systems
• Collection and recovery procedures

8. COMPLIANCE

All lending activities must comply with:

• Central Bank regulations
• Credit Bureaus regulations
• Anti-Money Laundering (AML) guidelines
• Know Your Customer (KYC) requirements

9. REVIEW AND AMENDMENTS

This policy shall be reviewed annually or as required to ensure alignment with regulatory requirements and market conditions.