Loan Policy for Model Microfinance Bank
Effective Date: 25th September, 2025
Welcome to Model Microfinance Bank (“we,” “our,” “us”). Please read these Terms and Conditions carefully before using our mobile app or website (“Services”). By accessing or using our Services, you agree to comply with and be bound by these Terms.
Loan Policy
This Loan Policy outlines the principles and procedures governing loan products offered by Model MFB LTD through the BankOne Mobile App. The policy ensures that lending operations are transparent, compliant, and aligned with our mission to promote financial inclusion.
1. Objectives of the Loan Policy
• Provide clear guidelines for loan application, approval, disbursement, and repayment via the BankOne mobile app.
• Promote responsible lending and minimize credit risk.
• Ensure compliance with the Central Bank of Nigeria (CBN) and other regulatory requirements.
• Safeguard customer data and uphold ethical banking practices.
2. Eligibility Criteria
To qualify for loans through the app, applicants must:
• Be at least 18 years of age.
• Maintain an active account with Model MFB LTD
• Provide valid identification (e.g., BVN, NIN, Voter’s Card, or Driver’s License).
• Demonstrate repayment capacity based on income, credit history, and transaction behavior.
• Pass BankOne’s integrated credit scoring and risk assessment checks.
3. Loan Products Offered
• Personal Loans – Short-term loans for emergencies and personal needs.
• Microenterprise Loans – Loans for small business operations.
• Salary Advance – Loans for employed customers with verifiable income.
• Group/Cooperative Loans – For registered groups or cooperatives.
(Each product will have its own terms: minimum/maximum loan amount, tenor, interest rate, and fees.)
4. Application & Approval Process
4.1. Customers apply through the BankOne Mobile App.
4.2. The system automatically validates KYC details and credit history.
4.3. Loan eligibility and amount are determined using BankOne’s credit scoring model.
4.4 Approval may be automatic (for digital nano-loans) or require loan officer review (for larger amounts).
4.5. Approved loans are disbursed directly to the customer’s bank account.
5. Interest Rates & Fees
• Interest rates shall be 22 to 25% Flat, subject to market conditions and CBN guidelines.
• Processing or management fees may apply and will be transparently disclosed before disbursement.
• Penalty fees may be applied for late repayment.
6. Security
• Two credible guarantors and Undated Commercial Bank cheque for loans below N1.5m
• Landed property with C of O for loans above N1.5m
7. Repayment Terms
• Repayment shall be made through the BankOne app using wallet balance, direct debit, or bank transfer.
• Customers may repay weekly or monthly depending on loan type.
• Early repayment is allowed without penalty.
8. Loan Monitoring & Recovery
• Loan accounts are monitored using BankOne’s portfolio tracking features.
• Automated reminders (SMS, email, or in-app notifications) are sent to customers before due dates.
• In case of default, recovery strategies include restructuring, guarantor enforcement, or reporting to credit bureaus in line with CBN regulations.
9. Credit Risk Management
• BankOne’s credit analytics will be used to assess borrower capacity and probability of default.
• Loan limits are set based on customer risk profile and repayment behavior.
• Portfolio-at-risk (PAR) shall be closely monitored to maintain financial sustainability.
10. Regulatory & Compliance
This policy complies with:
• CBN Prudential Guidelines for microfinance banks.
• Nigeria Data Protection Act (NDPA) 2023 for customer data privacy.
• Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.
11. Review & Updates
This Loan Policy will be reviewed annually or as required by regulatory changes. Updates will be communicated to customers through the BankOne app and official channels.