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Cameroon Baptist Convention Development fund (CBCDF)

We offer the full spectrum of services to help YOU, churches and  organizations work better. Everything from creating standards of excellence to aiding people and churches work in more effective ways, Loan wisely, also assessing how you’re doing, and helping you perform even better in future. Very few others do this, and just with three years full of achievements, you can bank on our loyalty to clients.

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(1) LOANS

CBC Development Fund is considered as the engine for the rapid growth of the Cameroon Baptist Convention (CBC) in order to improve its facilities for the ease of spreading the Gospel. A comprehensive and liberal lending policy is put in place to enable the Fund attract the needed funds to play its pre-eminent role in the Convention without any hurdles. Accordingly, this policy’s objectives is to ensure that CBCDF meets the genuine requirements and aspirations of Church institutions and Stakeholders.

The Loan Policy and Procedure Manual is intended to help Staff and Committee members provide loans that meet the credit needs of Convention institutions while simultaneously meeting our obligations to investors for safety, liquidity, and social and financial returns.

This should help the CBCDF’s staff and Committees make sound loan decisions, manage and monitor the Loan Fund’s risks related to its diverse borrowers,project types and credit terms; while also maintaining sufficient liquidity and income to meet overall CBCDF’s obligations to investors.

The CBCDF will rely on the best judgment of its professionals in reviewing and making loan decisions. The following criteria will be considered by the Loan Committee, and staff when reviewing a transaction; staff is expected to identify the risk of each transaction and identify appropriate mitigation on a case-by-case basis.

LOAN PRODUCTS

Land acquisition loans

- This is a product available to CBC Churches/Institutions who want to purchase land

- The duration of land acquisition loans shall not exceed 48 months

- The interest rate charged for land acquisition loans is 0.75% per month

Construction of Buildings loans

- These are loans to finance construction of Church buildings, School classrooms, Hospital/Health centre blocks, buildings of CBC institutions/structures, etc

- The duration of construction of buildings loans shall not exceed 60 months

- The interest rate charged for building loans is 0.75% per month

Construction of income generating projects

- These loans finance constructions of buildings for semi-business operations, retreat homes, pastoral centers or staff residential homes.

- The duration of construction of semi-business building shall not exceed 84 months

- The interest rate charged for semi-business building loans is 0.625% per month

Light and Heavy Equipment Loans

- These are loans to finance the acquisition of modern equipment to improve operational efficiency of an institution.

- The duration of equipment loans shall not exceed 36 months

- The interest rate charged for equipment loans is 0.833% per month

Movable Property loans

- These are loans to finance acquisition of rolling stocks such as bikes, vehicles, buses and trucks for the normal activities of the borrower’s business

- The duration of movable property loans shall not exceed 12 months

- The interest rate charged for movable property loans is 1% per month

Advance Fee loan

- These are loans to educational institutions wishing to carry out capital projects at the beginning of a school year with funds from fee that would be collected during that academic year.

- The duration of advance fee loans shall not exceed 12 months

- The interest rate for this loan product is 1% per month on the running balance of the loan left unpaid.

Golden loans

- These are loans from 100 million FCFA and above

- The duration of golden loans shall vary as per project but shall not exceed 10 years

- The interest rate for golden loan product is 0.5833% a month.

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(iii) Lending Conditions

Loan Service Fees

The CBCDF shall charge a service fee in respect of loans as follows:

  • Non-refundable application charge of 10,000 Francs for all ordinary members;
  • A minimum non-refundable loan inspection &processing fee paid upfront of 1% of Loan requested.
  • Site visit charges

Collateral Security

Collateral is required as a secondary source of loan repayment. At a minimum, any equipment, building, or other asset purchased with loan proceeds (not including raw materials or inventory or consumable stock) should be pledged or mortgaged to the Fund as collateral for the loan

Business Plan

In order to objectively appraise the loan, proposal formulation of business plan by the prospective borrower for the economic activity (construction semi-business building loans) they desire to pursue by obtaining the loan is very important. The business plan should facilitate loan officer and Credit Committee to assess the following:

  • Past experience to establish applicant’s ability and competence to manage the organisation’s income generating activity
  • Past experience and assurance in building growing customer base and mitigation plan to withstand fall in income due to crisis of any sort
  • Applicant’s preparedness/ability to bear and manage financial risk while conducting the activity
  • Applicant’s proper understanding of maintenance of books of accounts to ensure expected level of income in the organization
  • Detailed projected sources of income and cost under the activity to be pursued by obtaining the loan
  • Applicant’s knowledge and commitment to repayment of the loan on time.

 

3.4 Loan contract/Agreement

The contract/Agreement which must be signed by the borrower’s legal representatives and Management of the Fund shall be the legal binding document between the CBCDF and the borrower. It stipulates all the terms of the loans and conditions of repayment. In addition to the general requirements, loans must have the following additional conditions for proper control and covenants included in the contract;

  • The loan monitoring process must be sufficient to insure that all of the loan proceeds will be used for the intended purpose. The loan control must allow the CBCDF to perform an on-site inspection and audit of the collateral whenever requested. The CBCDF must perform such inspections no less that once every year depending on the type of collateral.
  • The borrower is given a loan for an intended purpose. The loan can be used only for that purpose, unless otherwise agreed upon, and amended in writing by CBCDF.

The borrower has a legal obligation to repay the loan within the terms and conditions set out in the contract. If these is not met the borrower will loss eligibility for any future financing and can face some consequences.

3.5 Loan Application Form /Field Visit

  • The borrower must complete the Loan Application Form (LAF)with the assistance of the Loan Officer. This loan form will help insure that adequate information about the financial condition of the borrower is obtained. The application should be filled out as completely as possible to provide sufficient information with which to begin the analytical process, From the basis for an initial site visit and understand proposed collateral. One of the objectives of thorough initial visits with the client is to determine the client’s character, verify the clients capacity, assess the business condition, establish prospects, and to gather supplemental financial information. Identification and appraisal of collateral is also essential during initial visits.

Loan Register/ File

The Loan officer shall keep a Loan Register with the following information:

  • Date of receiving the loan application
  • Date of application review by Loan Officer, Credit Committee or Executive committee
  • Amount applied for and amount approved
  • Loans approved and Loans rejected with reasons
  • Correspondances with the Borrower on a loan request
  • Borrower’s organizational documents
  • Loan documents
  • Disbursement records
  • Risk rating records
  • Borrower, guarantor and/or project financial information
  • Project pro formas
  • Project budgets
  • Loan application
  • Collateral information and other relevant documentation used in making the credit decision or reviewed prior to loan closing

Financial Record Keeping/management

Borrowers will have to present financial statements and records in accordance with standards applicable by the CBC and in the appropriate format which is important for accurate financial reporting and should be assessed by CBCDF. If the system is weak, the institution shall be advised to seek training to update and if information in the financial statement is different, the CBCDF analyst should identify the reason for the differences.

The competence and integrity of the Church’s financial staff is important. This is important as timely repayment of loans is directly related to honesty, goodwill and adequate financial management skills of the staff. Information on regularity of financial reporting, procedure for establishing church budget and execution and control of the budget also provides useful information on leadership character.

Independent information

Triangulating independent information about operating activities, cash flow, investments in fixed assets, other liabilities, and how the Church organization is operating as well as it is repaying other liabilities shall be reviewed.

 

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