Subloans Clause Samples
The Subloans clause defines the terms under which a borrower may extend portions of a primary loan to third parties, typically referred to as sub-borrowers. This clause outlines the conditions, limitations, and approval processes required for the creation of subloans, such as maximum amounts, eligible recipients, and reporting obligations. Its core practical function is to regulate and control the distribution of loaned funds beyond the original borrower, ensuring that the lender maintains oversight and mitigates risks associated with indirect lending.
Subloans. Section 4.01. Each Subloan shall carry interest at an appropriate rate, as provided in paragraph 11(iii) of Schedule 3 to this Loan Agreement, and shall be made on terms whereby the Borrower shall obtain, by a written agreement with the Qualified Enterprise in form acceptable to ADB, rights adequate to protect the interests of ADB and the Borrower. Each Subloan agreement shall appropriately reflect the obligations of the Borrower and the Qualified Enterprise assumed under this Loan Agreement in respect of the Qualified Project.
Section 4.02. Without limiting the generality of the foregoing provisions of Section 4.01 of this Loan Agreement and in addition to any other provisions which a prudent lender would request, each Subloan agreement shall include provisions to the effect that:
(a) the Qualified Enterprise shall carry out and operate the Qualified Project with due diligence and efficiency and in accordance with sound administrative, financial, economic, engineering, environmental, social safeguards, and business practices, including maintenance of adequate accounts and records;
(b) the proceeds of the Loan shall be used only for procurement in member countries of ADB, in accordance with procedures acceptable to ADB, of Goods produced in, and consulting services supplied from, such countries, and as set out in Schedule 2 to this Loan Agreement;
(c) the Goods, Works and consulting services to be financed out of the proceeds of the Loan shall be used exclusively in the carrying out of the Qualified Project;
(d) the Qualified Enterprise shall carry out and operate the Qualified Project in compliance with ADB's safeguards policies as required in paragraphs 6,7, 9 and 10 of Schedule 3 to this Loan Agreement;
(e) ADB shall have the right to audit and examine the records and accounts of the Borrower, the Qualified Enterprise, the Qualified Project, suppliers, and contractors relating to the Qualified Project;
(f) the Qualified Enterprise shall take out and maintain with responsible insurers insurance against such risks and in such amounts as shall be consistent with sound business practices, and, without any limitation upon the foregoing, such insurance shall cover hazards incident to the acquisition, transportation and delivery of Goods financed out of the proceeds of the Loan to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such Goods;
(g) ADB and the Borrower shall ea...
Subloans. (a) Except as ADB may otherwise agree, each of Bangladesh Bank, BASIC, and Eastern Bank shall ensure that the proceeds of each part of the Loan shall be used by the Participating MFI for making a Subloan to the Qualified ▇▇▇▇▇▇, and shall be applied exclusively to the cost of Goods, Works and Consulting Services required to carry out the Qualified Subproject in respect of which such part of the Loan was withdrawn from the Loan Account.
(b) In the carrying out of the Project, each of Bangladesh Bank, BASIC Bank and Eastern Bank shall ensure that the eligibility criteria with respect to Participating MFIs, Qualified Farmers, Qualified Subprojects, and Subloans as set out in Schedule 5 to the Loan Agreement are satisfied at all times.
(c) Except as ADB may otherwise agree, all Goods, Works and Consulting Services to be financed out of the proceeds of the Subloans shall be procured in accordance with the provisions of Schedule 4 to the Loan Agreement.
(d) All Subloans made by the Participating MFIs and approved by the Wholesale Banks shall be subject to post monitoring and review by ADB.
Section 2.02. Each of Bangladesh Bank, BASIC Bank and Eastern Bank shall cause each Participating MFI with which it concludes an Onlending Agreement to ensure that:
(a) the interest rate on the Subloan to the Qualified ▇▇▇▇▇▇ will fully take into account the recovery cost of lending including any increase due to inflation, plus a spread to cover administration expenses including project and technical support, the provision of grace periods to Qualified Farmers, and Qualified Small Borrower credit risk provided that Bangladesh Bank regulation may apply to set a ceiling acceptable to ADB on the interest rate to Subborrowers;
(b) the maximum principal amount of any Subloan shall not exceed Tk300,000; and
(c) the term and schedule of repayments of the Subloans shall be adopted to take into account the schedule for harvesting and post-harvesting activities, and seasonal patterns of income-generation typical for the particular HVC to be financed.
Section 2.03. Without limiting the foregoing provisions of Section
Subloans. Except as otherwise provided in this Agreement, the terms and conditions of, and procedures for making, Subloans shall be as set forth in the Operational Manual.
Subloans. IDCOL will use the OCR loan proceeds to provide medium to long-term subloans in local currency or US$ to medium-sized to large infrastructure subprojects (including RE and EE subprojects) with a total subproject cost in excess of $10 million. The onlending by IDCOL to eligible private sector subprojects will be at interest rates that reflect IDCOL’s cost of funds plus a spread to cover transactional costs and risks following commercial and competitive terms as determined by IDCOL.
Subloans. (a) Except as ADB may otherwise agree, the proceeds of each part of the Loan made available by the Borrower to GPG shall be used only for making through GFTC a subloan to a subborrower in respect of which such part of the Loan was withdrawn from the Loan Account and shall be applied exclusively to the cost of Goods, Works and consulting services required to carry out the subproject in respect of which such part of the Loan was withdrawn.
(b) Except as ADB may otherwise agree, all Goods, Works and consulting services to be financed out of the proceeds of the Loan shall be procured in accordance with the provisions of Schedule 2 to the Loan Agreement.
Section 2.02. (a) Notwithstanding any other provision of this Project Agreement, no withdrawals shall be made from the Loan Account in respect of any subproject until the following condition shall have been met: GFB shall have submitted to ADB a certificate that the Subproject Agreement and the Subloan Agreement related to any such subproject, which shall include the terms and conditions as referred to in Section 3.02(c) of the Loan Agreement and Sections 2.03 and 2.04 of this Project Agreement, shall have been duly executed and delivered on behalf of GFTC, the EPP-PMO and the subborrower, respectively, and shall have become fully effective and binding upon the parties thereto in accordance with their terms.
Subloans. (a) Except as ADB may otherwise agree, the proceeds of the Grant made available to PFI shall be used only for making Subloans to Eligible Subborrowers for Eligible Subborrower Subprojects and shall be applied exclusively to the cost of Goods, Works, Consulting Services and other items of expenditure required to carry out such Eligible Subborrower Subprojects.
(b) Except as ADB may otherwise agree, all Goods, Works and Consulting Services shall be procured in accordance with paragraph 10 of Schedule 3 to the Grant Agreement.
Section 2.02. OXUS shall provide to ADB for its prior written approval, full particulars of the first three proposed Subloans proposed to be issued by the PFI under each of the Climate Resilient Agriculture Credit Line and the Income Diversification Credit Line.
Section 2.03. OXUS shall ensure that except as ADB may otherwise agree, each Subloan: (a) carries interest at an appropriate rate that takes into account the cost of funds, administrative costs, credit and other applicable risks associated with the Subloan and an adequate profit margin for the PFI charged on a declining balance basis;
Subloans. (a) Except as ADB may otherwise agree, the proceeds of the Loan B shall be used only for making a Subloan to the selected Qualified Project in respect of which such part of the Loan was withdrawn from the Loan Account B and shall be applied exclusively to the cost of Goods, Works, Consulting Services and other items of expenditure required to carry out the Qualified Project in respect of which such part of the Loan was withdrawn.
(b) Except as ADB may otherwise agree, all Goods, Works and Consulting Services to be financed out of the proceeds of the Loan B shall be procured in accordance with the provisions of paragraph 7 of Schedule 4 to the Loan Agreement.
Section 2.02. (a) Whenever VDB proposes to make a Subloan in an amount exceeding the equivalent of seven million Dollars ($7,000,000) or such other sum as shall from time to time be agreed between ADB and VDB, VDB shall, before requesting a withdrawal, submit to ADB an application for approval of such Subloan. Such application shall be in a form satisfactory to ADB and shall contain a description and appraisal of the Qualified Project, the terms and conditions of the proposed Subloan and such other information as ADB shall reasonably request. A Subloan shall be deemed to exceed the equivalent of the amount specified in or agreed pursuant to this paragraph if the amount of such Subloan, when added to the amount of any other Subloan or Subloans previously made or authorized for the same Qualified Project, exceeds the equivalent of the amount so specified or agreed.
Subloans. The Borrower shall cause the PFIs to ensure that:
Subloans. Each Subloan shall carry interest at an appropriate rate acceptable to ADB and shall be made on terms under which IDCOL obtains rights adequate to protect the interests of ADB and the Borrower. IDCOL shall procure that each Subloan Agreement shall appropriately reflect the obligations that IDCOL and the Qualified Enterprise assumed under this Loan Agreement in respect of the Qualified Subproject.
Subloans. (a) Except as ADB may otherwise agree, the proceeds of the Grant made available to Arvand shall be used only for making Subloans to Qualified Subborrowers for Qualified Subprojects and shall be applied exclusively to the cost of Goods, Works and Consulting Services and other items of expenditure required to carry out such Qualified Subprojects.
(b) Except as ADB may otherwise agree, all Goods, Works and Consulting Services shall be procured in accordance with the provisions of Schedule 3 to the Grant Agreement.
Section 2.02. Arvand shall provide to ADB for its prior written approval, full particulars of the first three proposed Subloans proposed to be issued by Arvand.
Section 2.03. Arvand shall ensure that except as ADB may otherwise agree, each Subloan: (a) carries interest at an appropriate rate that takes into account the cost of funds, administrative costs, credit and other applicable risks associated with the Subloan and an adequate profit margin for Arvand charged on a declining balance basis;