Credit Lines For Financial Institutions to Finance SMEs
Introduction
- Medium- or long-term loans
- Target small and medium-sized enterprises (SMEs) in both public and private sectors through financial institutions
- Aim to improve SME liquidity and support sustainable development
- Interest periods and profit margins determined according to the nature and type of the project
Credit Type
Medium- and Long-Term credit
Target Clients
Small and medium enterprises from both the public and private sectors are financed indirectly through financial institutions, in accordance with the eligibility criteria set by the Bank. The full credit risk is borne by the beneficiary financial institutions.
Context
The Bank provides a credit line to financial institutions in the Arab Maghreb States for the purpose of financing small and medium enterprises. This type of financing represents a strategic opportunity for banks to support local economic growth. It enables banks to offer loans to small and medium enterprises to develop their projects and enhance their competitiveness.
Product Features
Objective :
- Improve Liquidity for Small and Medium Enterprises (SMEs): Supporting SMEs in accessing the financing needed to develop their projects and expand their operations, thereby enhancing their competitiveness in the market.
- Support Sustainable Development: Enabling the private sector to implement innovative and sustainable projects by providing financing, contributing to job creation and improving local economic conditions.
Financing Ratio:
Maximum Financing Ratio: The limits are defined in the loan agreement signed with the Bank. The following are illustrative examples of such limits:
- The beneficiary bank may not allocate more than 20% of the credit line to a single client.
- The beneficiary bank may not use the credit line to finance its affiliates or companies in which it holds equity.
- Companies financed through this line must be non-classified and have a strong and sustainable financial position.
Loan Term:
- Medium-term loan : equal to or less than 5 years
- Long-term loan : 5 years or more.
Interest and Profit Margin Payment Schedule:
Payment frequency is determined according to the type of financing granted (quarterly / semi-annually).
Principal Repayment Schedule:
In periodic installments.
Financial Terms:
Financial conditions are determined based on the bank’s pricing policy:
- Interest Rate or Profit Margin : The interest rate (fixed or variable) is set according to the nature and risk profile of the financing application and in line with the bank’s pricing policy.
- Applicable Fees and Reference Charges:
- Commitment Fee: A percentage of the total loan amount.
- Non-Utilization Fee: A percentage of the unused portion of the loan.
- Application Review Fee: A fixed lump sum.
Guarantees:
The bank reserves the right to request any guarantees it deems necessary as part of the credit analysis.
Marketing Approach
- Direct marketing.
- Digital marketing.
- Marketing through international and local financial institutions.