Share Purchase Loan Scheme

Product Description

The Share Purchase Loan Facility is designed to assist customers in fulfilling their dreams and ambitions by providing top-quality financial services for the acquisition of shares. This facility will finance the purchasing of shares on the Malawi Stock Exchange through Stock Brokers Malawi Limited.

Target Market

The facility is available to:

• Individuals with regular income (e.g., salary/drawings) consistently received through National Bank of Malawi's account for a minimum of 3 months.
• All customers, with or without existing shares on the stock market.
• Foreign nationals with a Temporary Employment Permit or Permanent Resident permit.
• SME business entities with consistent account deposits for at least three months.

 

Attributes

• Repayable over a maximum period of 36 months.
• Flexible repayment options, including early redemption without penalties.
• The minimum loan amount is MK250,000.00, with the maximum being contingent upon the repayment amount not exceeding 30% of the borrower's income.

 

Underwriting Requirements

• Proof of the customer's income or earnings is required, such as the latest payslip or a tenancy agreement.
• The ADV4 form must be completed by the customer.
• KYC (Know Your Customer) documentation is needed, including the most recent utility bill and National ID.
• For SMEs, projected cash flows and the latest financial statements must be provided.

Collateral Arrangement

• Secured by existing shares held by the customer on the Malawi Stock Exchange at 85% of the market value.
• New shareholders contribute 15% towards the purchase, with purchased shares serving as part of collateral until full repayment.

 

Pricing/Cost to Customer

• Arrangement fees of 1% with a minimum of Mk20,000.00, collected prior to drawdown.
• Interest applicable at reference rate plus a margin of 6.1%.

Benefits to Customer

• Enables the acquisition of shares, aiding in investment and wealth creation.
• Flexible repayment terms and the option for early repayment without penalties.

Terms and Conditions

• Applicants must meet the Bank's criteria for regular income and account activity.
• The loan must be used exclusively for the purchase of shares on the Malawi Stock Exchange, promoting investment and financial growth.
• Repayment including interest commences one month after the loan is granted.
• Loans contracted for not more than 36 months, funded by short-term deposits.
• In case of default, the Bank reserves the right to set off any outstanding sums against the shares or any other funds held by the customer.
• The loan is subject to the Bank's standard credit assessment and approval processes.