Long Term Loans:
Long-term loans are project loans that are intended for projects of long-term nature and with long repayment periods. Long term project loans must come with a detailed implementation schedule, which should not exceed 24 months from initial disbursement date.
Medium Term Loans:
Medium-term loans are project loans that are intended for projects with a capital expenditure component, including expansion of facilities, refurbishment of facilities, and re-re-equipment as well as establishment of new projects with cash flows. Medium- term project loans must come with a detailed implementation schedule, which should not exceed 12 months from initial disbursement date.
Short Term Loans:
Short term- loans are for purchasing either raw materials / productive inputs needed in the day to day operations of an entity or acquisition of assets with a cash flow that allows a loan repayment period of at most 18 months from initial disbursement. It may be for the working capital component & assets of a green project or for an existing project.
The Bank’s direct equity investment shall be in both start up and existing projects or enterprises, in partnership with private co- investors. The project may be initiated by the Bank and/or private investor. The Bank’s exit from the project should leave the project ongoing and successful. The Bank should not be a majority shareholder in such investment.
Trade Finance Loans:
Trade Finance loans are loans granted by the Bank against a lien on goods in commercial or bonded warehouse. Other forms of collaterals may also be provided as security for the loans.
This will take the form of an unconditional undertaking by UDBL to pay a specified sum of money to a beneficiary against presentation of a written demand and any other documents specified in the guarantee. The beneficiary will be indemnified for a stated amount against the failure of the Bank customer to fulfill its obligation under the underlying transactions.