Bilateral Loan Agreement for Nigeria

Bilateral Loan Agreement Template for Nigeria

A comprehensive legal document governed by Nigerian law that establishes the terms and conditions of a loan between two parties - a lender and a borrower. The agreement details the loan amount, interest rates, repayment terms, security arrangements, and obligations of both parties while ensuring compliance with Nigerian banking and financial regulations, including the Banks and Other Financial Institutions Act (BOFIA) 2020 and relevant Central Bank of Nigeria directives. The document incorporates necessary provisions for enforcement under Nigerian law and includes specific requirements for security registration and perfection under local legislation.

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What is a Bilateral Loan Agreement?

The Bilateral Loan Agreement is a fundamental financial instrument used in Nigerian business and banking transactions when one party (the lender) agrees to provide financial assistance to another party (the borrower) under specific terms and conditions. This document is essential for both corporate and individual lending arrangements, ensuring compliance with Nigerian financial regulations, including the Banks and Other Financial Institutions Act (BOFIA) 2020 and Central Bank of Nigeria guidelines. The agreement serves as a comprehensive framework detailing loan amount, interest calculations, repayment schedules, security arrangements, events of default, and remedies available to parties. It's particularly important in the Nigerian context where formal documentation of financial obligations is crucial for enforcement and regulatory compliance. The document should be customized based on the nature of the borrower (corporate or individual), type of security offered, and specific requirements of the transaction while maintaining compliance with local laws and banking regulations.

What sections should be included in a Bilateral Loan Agreement?

1. Parties: Identification of the lender and borrower with full legal names and addresses

2. Background: Context of the loan agreement and the parties' intention to enter into the lending arrangement

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. The Facility: Details of the loan amount, purpose, and drawdown conditions

5. Interest: Interest rate, calculation method, and payment terms

6. Repayment: Terms and schedule for repayment of the principal amount

7. Security: Details of any security or collateral provided for the loan

8. Representations and Warranties: Statements of fact and assurances given by the borrower

9. Covenants: Positive and negative obligations of the borrower during the loan term

10. Events of Default: Circumstances that constitute default and consequences thereof

11. Fees and Expenses: All fees payable and allocation of costs and expenses

12. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

13. Notices: Communication methods and contact details for formal notices

14. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for disputes

15. Execution: Signature blocks and execution formalities

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

1. Currency Provisions: Required for loans involving foreign currency, specifying exchange rates and currency risk allocation

2. Tax Provisions: Detailed tax provisions needed when tax implications are significant or cross-border elements exist

3. Guarantees: Include when a third party is guaranteeing the loan

4. Insurance: Required when specific insurance coverage is mandatory for the security assets

5. Financial Covenants: Include for corporate borrowers where financial metrics need to be maintained

6. Agency and Trust: Required in syndicated loans or where security is held on trust

7. Force Majeure: May be included to address unforeseen circumstances affecting loan performance

8. Anti-Money Laundering: Required for compliance with AML regulations, especially in large or international loans

What schedules should be included in a Bilateral Loan Agreement?

1. Conditions Precedent: List of documents and conditions required before loan drawdown

2. Drawdown Notice: Form of notice for requesting loan disbursement

3. Repayment Schedule: Detailed schedule of repayment dates and amounts

4. Security Documents: Forms of security documents and perfection requirements

5. Fee Schedule: Detailed breakdown of all applicable fees

6. Form of Transfer Certificate: Standard form for transferring loan participation

7. Advance Request Form: Template for requesting subsequent drawdowns if applicable

8. Compliance Certificate: Template for periodic compliance certification by borrower

Authors

Alex Denne

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

Jurisdiction

Nigeria

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Agriculture

Oil and Gas

Technology

Telecommunications

Construction

Healthcare

Education

Retail

Transportation and Logistics

Mining

Energy

Small and Medium Enterprises

Relevant Teams

Legal

Finance

Risk Management

Compliance

Credit

Treasury

Corporate Banking

Operations

Due Diligence

Document Management

Transaction Advisory

Regulatory Affairs

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Risk Manager

Credit Officer

Loan Officer

Compliance Officer

Banking Relationship Manager

Treasury Manager

Financial Controller

Company Secretary

Contract Manager

Due Diligence Officer

Portfolio Manager

Credit Risk Analyst

Banking Operations Manager

Legal Director

Finance Manager

Transaction 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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