Commercial Loan Agreements

01 October 2006

This guidebook introduces borrowing microfinance institutions (MFIs or borrowers) to important provisions of a standard commercial bank loan agreement. It does not provide an exhaustive description of the contents of a loan agreement. (In any event, standard forms of loan agreements vary depending on several factors, including the lender, the country in which the lender is located, borrower characteristics, and loan size.) Borrowers should use this guidebook to help them understand the risks associated with some of the important provisions of a loan agreement. This guidebook also can help borrowers identify departures from generally accepted provisions that may negatively affect their interests.