The Loan Servicing Agreement is a critical document used when a financial institution or loan owner wants to outsource the administration and management of their loan portfolio to a specialized servicer in Nigeria. This arrangement is common in various lending scenarios, from consumer loans to corporate credit facilities. The agreement must comply with Nigerian banking regulations, particularly the Banks and Other Financial Institutions Act (BOFIA) 2020 and Central Bank of Nigeria directives. It typically covers all aspects of loan administration, including payment processing, borrower communications, default management, regulatory compliance, and reporting. The document is essential for establishing clear service levels, operational procedures, and accountability in loan portfolio management while ensuring compliance with local financial regulations and consumer protection requirements.

1. Parties: Identifies and defines the contracting parties - typically the Loan Owner/Lender and the Loan Servicer

2. Background: Provides context for the agreement, including the loan portfolio to be serviced and the servicer's qualifications

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

4. Appointment and Scope of Services: Details the appointment of the servicer and outlines the core services to be provided

5. Term and Termination: Specifies the duration of the agreement and circumstances for termination

6. Servicer's Duties and Responsibilities: Comprehensive listing of the servicer's obligations in managing the loan portfolio

7. Standard of Care and Performance: Establishes the expected service levels and performance standards

8. Fees and Expenses: Details the compensation structure and reimbursable expenses

9. Reporting Requirements: Specifies regular reporting obligations and documentation requirements

10. Compliance with Laws: Ensures adherence to Nigerian banking regulations and other applicable laws

11. Representations and Warranties: Contains standard representations and warranties from both parties

12. Confidentiality and Data Protection: Addresses handling of confidential information and compliance with NDPR

13. Indemnification: Outlines mutual indemnification obligations

14. Dispute Resolution: Specifies procedures for resolving disputes and applicable jurisdiction

15. General Provisions: Contains standard boilerplate clauses including notices, amendments, and assignment