A loan is the provision of money temporarily to a borrower, (usually at interest). It is applied to enable clients meet their working capital requirements, fund specific projects etc. Loans can be classified according to their maturity, collateral and other special features. They are however broadly classified into
- Short-term loans (loans and advances with 1 - 12 months tenor)
- Term Loans (loans and advances with over 12 months tenor)
Features
It is Tenor based (that is, it is for a specified period of time)
* Purpose/Usage must be specified
* An appropriate collateral must be provided
* Repayment plan and source of repayment must be clearly stated
* Fees/Charges are negotiable and must be agreed upon before the commencement of the facility.
Benefits
* It supports working capital.
* It enhances Business growth
* It increases business turnover and profit
Target Market
* Manufacturers
* Distributors and Traders
* Retailers
* Companies in the Energy Sector
* Other financial institutions (Insurance, Funds Managers etc)
* Agro-Allied Firms
* Individuals etc
