LOAN POLICY MANUAL
WE MICROFINANCE BANK LTD (WeBank MFB)
Policy Version: 1.0
Effective Date: 19th October 2025
Approved By: Board of Directors
Review Cycle: Annually or as required
1. POLICY STATEMENT
This Loan Policy establishes the principles, standards, and procedures governing credit operations of WeBank MFB.
The objective is to:
Promote safe and sound lending practices
Ensure quality asset creation
Minimize credit risk and loan losses
Ensure compliance with regulatory requirements
Support financial inclusion and economic growth
The Bank shall operate in accordance with regulations issued by the Central Bank of Nigeria and other applicable Nigerian laws.
2. OBJECTIVES OF THE LOAN POLICY
Maintain a healthy and diversified loan portfolio
Ensure loans are granted based on capacity and character
Reduce Non-Performing Loans (NPLs)
Protect depositors’ funds
Maintain regulatory compliance
3. SCOPE
This policy applies to:
Board of Directors
Management
Credit Committee
Loan Officers
Risk Management Unit
Internal Audit
It covers all lending activities of the Bank including retail, SME, salary-backed, group lending, and microcredit facilities.
4. LOAN PRODUCTS
The Bank may offer the following loan products:
4.1 Micro Loans
Target: Traders, artisans, small businesses
Tenure: 1–12 months
Amount: As approved by Credit Committee
Repayment: Weekly or Monthly
4.2 SME Loans
Target: Registered small and medium enterprises
Tenure: Up to 24 months
Repayment: Monthly
4.3 Salary Advance Loans
Target: Salaried employees with verifiable income
Tenure: Up to 6 months
Repayment: Direct salary deduction
4.4 Asset Financing
For purchase of equipment, tools, or business assets
4.5 Agricultural Loans
For smallholder farmers and agro-businesses
The Bank reserves the right to introduce additional loan products subject to Board approval.
5. CREDIT PRINCIPLES
All lending decisions shall be guided by:
Character – Integrity and repayment history
Capacity – Ability to repay from cash flow
Capital – Borrower’s financial stake
Collateral – Security provided
Conditions – Economic and industry factors
6. LOAN ELIGIBILITY CRITERIA
To qualify for a loan, applicants must:
Be at least 18 years old
Operate a verifiable business or have steady income
Maintain an account with WeBank MFB
Provide valid identification (NIN, BVN, etc.)
Meet KYC requirements
Have satisfactory credit history
The Bank shall verify credit history through approved credit bureaus.
7. LOAN APPLICATION PROCESS
Submission of completed application form
Provision of required documents
Business appraisal / credit analysis
Risk assessment
Credit Committee review
Approval or rejection
Loan documentation and disbursement
No loan shall be disbursed without proper documentation.
8. CREDIT APPRAISAL AND RISK ASSESSMENT
Loan Officers shall conduct:
Cash flow analysis
Business site visits
Credit bureau checks
Guarantor verification
Collateral valuation
Risk grading shall be applied to all facilities.
9. LOAN APPROVAL AUTHORITY
Approval limits shall be defined as follows:
Loan Officer – Up to [Insert Limit]
Branch Manager – Up to [Insert Limit]
Credit Committee – Above Branch Limit
Board – Large exposure loans
All approvals must be documented and minuted.
10. COLLATERAL POLICY
Acceptable collateral may include:
Cash deposit lien
Guarantors
Movable assets
Landed property (where applicable)
Salary domiciliation
Collateral must be properly documented and perfected where necessary.
11. LOAN DOCUMENTATION
Required documents may include:
Loan Agreement
Offer Letter
Promissory Note
Guarantor Form
Collateral Agreement
Post-dated cheques (where applicable)
All documents must be properly executed before disbursement.
12. LOAN DISBURSEMENT
Disbursement shall be made directly into borrower’s account.
Partial disbursement may apply for project-based loans.
Loan tracking begins immediately after disbursement.
13. INTEREST RATE POLICY
Interest rates shall:
Be competitive and market-aligned
Reflect risk profile
Comply with regulatory guidance
Be clearly disclosed to customers
The Bank reserves the right to review rates periodically.
14. LOAN MONITORING AND SUPERVISION
Loan Officers shall:
Conduct periodic business visits
Monitor repayment schedules
Identify early warning signals
Submit monitoring reports
The Risk Unit shall review portfolio quality monthly.
15. LOAN REPAYMENT
Repayment methods may include:
Direct account debit
Standing instruction
Salary deduction
Cash deposit
Digital payment channels
Early repayment may attract fees if specified in the offer letter.
16. DELINQUENCY MANAGEMENT
A loan becomes:
Past Due: 1–30 days
Substandard: 31–90 days
Doubtful: 91–180 days
Lost: Above 180 days
Recovery measures include:
Reminder calls and SMS
Demand letters
Guarantor engagement
Collateral realization
Legal action
Provisioning shall comply with CBN Prudential Guidelines.
17. LOAN WRITE-OFF POLICY
Loans may be written off after:
Exhaustion of recovery efforts
Approval by Board
Proper documentation
Write-off does not extinguish borrower’s obligation to repay.
18. CREDIT RISK MANAGEMENT
The Bank shall:
Maintain Portfolio at Risk (PAR) monitoring
Set NPL threshold targets
Diversify loan portfolio
Conduct stress testing
The Risk Management Unit shall report quarterly to the Board.
19. RELATED PARTY LENDING
Loans to Directors, Management, and related parties must:
Be fully disclosed
Be approved by the Board
Be conducted at arm’s length
Comply with regulatory limits
20. INTERNAL CONTROL AND AUDIT
Internal Audit shall:
Conduct periodic credit reviews
Ensure compliance with policy
Report deviations to the Board
21. POLICY REVIEW
This Loan Policy shall be reviewed annually or when:
Regulatory changes occur
Economic conditions significantly shift
Portfolio performance deteriorates
22. ETHICS AND CONFLICT OF INTEREST
Staff involved in lending must:
Avoid personal interest conflicts
Not accept gifts or inducements
Maintain confidentiality
Violation shall attract disciplinary action.
Loan Policy – WeMFB
This Loan Policy provides the framework for prudent lending operations at WeBank MFB and ensures alignment with regulatory standards, risk management best practices, and sustainable financial growth.
