Master Loan Agreement for Nigeria

Master Loan Agreement Template for Nigeria

A comprehensive legal agreement governed by Nigerian law that establishes the framework for a lending relationship between a financial institution and a borrower. The document sets out the terms and conditions for multiple loan facilities that may be extended over time, including drawdown mechanisms, interest calculations, repayment terms, representations and warranties, covenants, and events of default. It incorporates requirements under Nigerian banking regulations, financial laws, and consumer protection frameworks, while providing flexibility for multiple facilities without requiring new agreements for each loan.

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What is a Master Loan Agreement?

The Master Loan Agreement serves as the primary framework document for establishing an ongoing lending relationship between financial institutions and borrowers in Nigeria. It is designed to facilitate multiple loan facilities under a single umbrella agreement, reducing the need for separate documentation for each new loan while ensuring compliance with Nigerian banking regulations, the Banks and Other Financial Institutions Act (BOFIA), and other relevant financial laws. This Master Loan Agreement is particularly useful for corporate borrowers who anticipate requiring multiple facilities over time, as it standardizes terms and streamlines the lending process while incorporating necessary protections for both lender and borrower. The agreement includes comprehensive provisions for drawdown procedures, security arrangements, covenant packages, and enforcement mechanisms, all tailored to the Nigerian legal and regulatory environment.

What sections should be included in a Master Loan Agreement?

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

2. Background: Recitals explaining the context and purpose of the agreement

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement and rules of interpretation

4. The Facility: Core terms of the lending facility including amount, purpose, and availability

5. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

6. Drawdown: Procedures and requirements for requesting and receiving loan disbursements

7. Interest: Interest rate, calculation method, and payment provisions

8. Repayment: Terms and schedule for repayment of the loan

9. Prepayment: Provisions for early repayment and any associated fees

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

11. Covenants: Ongoing obligations of the borrower during the loan term

12. Events of Default: Circumstances constituting default and consequences

13. Changes to Parties: Provisions for assignment and transfer of rights

14. Payments: Payment mechanics, currency, and tax provisions

15. Notices: Communication procedures between parties

16. General Provisions: Boilerplate clauses including severability, entire agreement, etc.

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

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

1. Security: Details of any security or collateral arrangements - include if the loan is secured

2. Guarantee: Terms of any guarantee arrangements - include if there are guarantors

3. Multiple Borrower Provisions: Special provisions for multiple borrowers - include if more than one borrower

4. Currency Provisions: Special provisions for foreign currency loans - include for non-Naira facilities

5. Islamic Banking Provisions: Specific provisions for Sharia-compliant financing - include for Islamic banking facilities

6. Increased Costs: Provisions for dealing with regulatory changes affecting the lender's costs - include for longer-term facilities

7. Market Disruption: Provisions dealing with market disruption events - include for facilities with floating rates

8. Anti-Money Laundering: Specific AML provisions - include for high-value facilities or high-risk borrowers

What schedules should be included in a Master Loan Agreement?

1. Form of Drawdown Notice: Standard form for requesting loan disbursements

2. Conditions Precedent Documents: List of required documents and conditions to be satisfied

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

4. Form of Transfer Certificate: Standard form for transferring rights under the agreement

5. Security Documents: Forms of security documents and collateral agreements

6. Fees and Charges: Detailed breakdown of all applicable fees and charges

7. Approved Purpose: Detailed description of permitted use of loan proceeds

8. Contact Details: List of authorized representatives and contact information

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 & Financial Services

Manufacturing

Real Estate & Construction

Oil & Gas

Telecommunications

Agriculture

Healthcare

Retail & Consumer Goods

Technology

Infrastructure

Mining

Transportation & Logistics

Power & Energy

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Operations

Corporate Finance

Company Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Credit Risk Manager

Relationship Manager

Corporate Banking Officer

Loan Officer

Financial Controller

Company Secretary

Risk Manager

Corporate Finance Manager

Banking Operations Manager

Credit Analyst

Transaction Manager

Industries
Nigerian Contract Law / Contract Act: Provides the fundamental legal framework for contract formation, validity, and enforcement. Essential for ensuring the loan agreement meets basic contractual requirements.
Banks and Other Financial Institutions Act (BOFIA): Regulates banking operations and financial institutions in Nigeria, including lending practices and requirements for financial transactions.
Central Bank of Nigeria Act: Establishes regulatory framework for monetary policy and financial sector supervision, including interest rate guidelines and lending regulations.
Money Laundering (Prohibition) Act: Sets requirements for due diligence, documentation, and reporting in financial transactions to prevent money laundering.
Secured Transactions in Movable Assets Act 2017: Governs the creation and enforcement of security interests in movable assets, relevant for collateral arrangements in loan agreements.
Recovery of Debts and Financial Malpractices in Banks and Other Financial Institutions Act: Provides framework for debt recovery and establishes special tribunals for resolving financial disputes.
Evidence Act: Governs the admissibility of evidence in legal proceedings, important for documentation requirements and enforcement.
Bankruptcy Act: Relevant for including provisions related to borrower insolvency and creditor rights in default scenarios.
Consumer Protection Framework: CBN guidelines protecting consumer rights in financial services, including requirements for fair lending practices and disclosure.
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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