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Loan Purchase Agreement for Nigeria

Loan Purchase Agreement Template for Nigeria

A comprehensive agreement governed by Nigerian law that facilitates the transfer of loans from one entity to another. The document addresses key aspects of loan transfers including purchase price, representations and warranties, regulatory compliance under Nigerian banking laws, and transfer mechanics. It incorporates necessary provisions to comply with the Banks and Other Financial Institutions Act (BOFIA) and Central Bank of Nigeria regulations, while ensuring proper documentation of the transfer of rights, obligations, and associated security interests. The agreement includes provisions for both performing and non-performing loans, and can be adapted for various types of loan portfolios.

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What is a Loan Purchase Agreement?

The Loan Purchase Agreement is a crucial document used in the Nigerian financial sector for transferring loan portfolios between entities. It is particularly relevant in scenarios such as bank restructuring, non-performing loan disposals, or strategic portfolio management. The agreement must comply with Nigerian banking regulations, including BOFIA and Central Bank of Nigeria requirements, while addressing practical aspects of loan transfers such as notice requirements, security interest transfers, and ongoing servicing arrangements. This document is essential for financial institutions operating in Nigeria that engage in loan trading, portfolio sales, or debt restructuring activities. The agreement can be customized for different types of loans (corporate, consumer, secured, unsecured) and can accommodate both single loans and portfolio transfers.

What sections should be included in a Loan Purchase Agreement?

1. Parties: Identification of the seller and purchaser of the loans

2. Background: Context of the transaction and brief description of the loans being sold

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Sale and Purchase: Core provisions regarding the sale and purchase of the loans

5. Purchase Price and Payment: Details of the purchase price and payment mechanisms

6. Conditions Precedent: Conditions that must be satisfied before completion

7. Completion: Process and requirements for completing the transfer

8. Seller's Representations and Warranties: Representations and warranties regarding the loans and seller's authority

9. Purchaser's Representations and Warranties: Representations and warranties regarding purchaser's authority and capacity

10. Transfer and Perfection: Mechanisms for transferring the loans and perfecting the purchaser's title

11. Regulatory Compliance: Compliance with Nigerian banking and financial regulations

12. Confidentiality: Provisions regarding confidential information

13. Notices: Process for giving notices under the agreement

14. Governing Law and Jurisdiction: Nigerian law as governing law and jurisdiction provisions

What sections are optional to include in a Loan Purchase Agreement?

1. Servicing Arrangements: Required if there are ongoing servicing obligations for the loans

2. Security Transfer: Required if there are security interests associated with the loans

3. Third Party Consents: Required if borrower or other third party consents are needed

4. Post-Closing Obligations: Required if there are continuing obligations after completion

5. Tax Provisions: Detailed tax provisions if specific tax treatments or allocations are required

6. Data Protection: Required if personal data is involved in the transfer

7. Anti-Money Laundering: Detailed AML provisions if required by transaction size or nature

8. Further Assurance: Additional provisions for future actions to perfect the transfer

What schedules should be included in a Loan Purchase Agreement?

1. Schedule 1 - The Loans: Detailed list and description of the loans being purchased

2. Schedule 2 - Completion Requirements: List of documents and actions required at completion

3. Schedule 3 - Form of Transfer Certificates: Template documents for transferring the loans

4. Schedule 4 - Seller's Power of Attorney: Form of power of attorney for post-completion actions

5. Schedule 5 - Notice to Borrowers: Form of notice to inform borrowers of the transfer

6. Schedule 6 - Security Documents: List and copies of security documents if applicable

7. Schedule 7 - Required Consents: List of required third-party consents if applicable

8. Appendix A - Loan Files: Index of loan documentation being transferred

9. Appendix B - Due Diligence Findings: Summary of due diligence results if relevant

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Nigeria

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions












































Clauses
































Relevant Industries

Banking

Financial Services

Asset Management

Debt Collection

Investment Banking

Private Equity

Real Estate Finance

Infrastructure Finance

Commercial Lending

Consumer Finance

Relevant Teams

Legal

Finance

Credit Risk

Portfolio Management

Treasury

Compliance

Loan Operations

Due Diligence

Transaction Management

Debt Recovery

Risk Assessment

Credit Administration

Relevant Roles

Chief Financial Officer

Head of Legal

Portfolio Manager

Credit Risk Manager

Treasury Manager

Loan Operations Manager

Compliance Officer

Due Diligence Officer

Transaction Manager

Senior Legal Counsel

Financial Controller

Credit Administrator

Portfolio Analyst

Debt Recovery Officer

Risk Assessment Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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