An on-lending agreement between the PFESP and ACAD finance where the lender (PFESP) grants a loan to the borrower (ACAD) and the borrower repays the loan the lender, both parties agree to keep, perform and fullfill promisses and conditions within the framework of the program START UP Palestine.
Terms and Conditions:
- The lender has agreed to make available to the borrower a term of loan facility in an aggregate amount in US$ equal to EURO 398,000.
- The loan will be transferred to the borrower’s bank account in US at the exchange rate of the transfer date and the borrower is commited to pay back the loan equal to amoount received in US$ plus due interest and fees.
- The borrower shall use the loan to finance sub-loans to individuals or enterprises.
- The duration of the loan is 4 years.
- The loan bears simple interest rate on declining basis. The annual interest rate is 2%. The borrower should charge its interest rate on sub loans based on its own pricing policy, but its mandatory that the average interest rate on start up sub loans should be charged to (Mustaqbalna Project).
- Interest rate on over due payments of principal or interest will be 1% higher than the normal rate applicable to the loan.
- The grace period of the loan to the borrower is 12 months. No grace period is allowed for payment of interest due on the loan.
- The borrower wil be responsible for ensuring at any time the compliance of all the risk management policies and procedures as required by the PMA.
- At least 5% of the total loan shall be used to purchase goods and services of Italian origin.
- On completion of all formalities and transmissions of required documents, the lender will disburse the loan to the borrower in one single tanche. The total amount of this agreement decided based on the borrower portfolio and based on the fact that at least 80% will be lent to end beneficiaries during the 1st year of the agreement.
The lending framework approach will be the same as mentioned above at the START-UP Palestine program.