Purpose and Scope APPLICATION DEFINITIONS GENERAL RULES LOAN SCHEMES REGULAR LOAN...

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2 Contents Purpose and Scope APPLICATION DEFINITIONS GENERAL RULES LOAN SCHEMES REGULAR LOAN TARGETED LOAN EXECUTIVE LOAN CAR SCHEME PURCHASE / DELIVERY PROCESS THE HOUSEHOLD EQUIPMENT SCHEME SHORT-TERM EMERGENCY LOAN (STEL) BAD LOAN BAD LOAN RECOVERY UNDERTAKING... 9 Doc No: COOP/LN/0001 Revision: 4 Date: 10/08/2018 Page 2 of 9

3 1.0 APPLICATION This procedure is applicable to ONLY members who wish to obtain loan from NLNG-COOP. 2.0 DEFINITIONS Within the context of this document, the following definitions are applicable. NLNG: Nigeria LNG Ltd. NLNG-COOP: The Cooperative Society of NLNG Staff. Member: Any person who has been admitted as a member of NLNG-COOP in accordance with NLNG-COOP byelaws and operating guidelines. These guidelines do not apply to associate members. Loan: All monies that NLNG-COOP lends to a member. Applicant: Any member who applied for loan from NLNG-COOP. Beneficiary: Any member that obtained loan from NLNG-COOP. Principal: The amount of money that is borrowed by beneficiary. Interest: Charge paid on loan by a beneficiary. Administrative Charge: Extra money paid by beneficiary to cover the cost of loan administration. Such money shall be added to the loan principal once disbursement is made to beneficiary. Tenor: The length of time in months a beneficiary has agreed to repay principal and interest. Total Monthly Commitment: This is the sum of member s monthly savings deductions, any monthly repayment for outstanding or intending loan and any other deduction by NLNG (e.g. NLNG Car Loan, national pension contribution etc). Normal Month: Any month where there is no special payment or lump sum payment from NLNG. Net Monthly Pay: Monthly net pay from payroll of a member on a normal month. 3.0 GENERAL RULES Below are general rules governing any of the NLNG-COOP loan schemes. Except otherwise explicitly stated on the loan scheme, the following conditions shall apply. i. An applicant must have been a registered member of the society for a period not less than 6 months confirmed by check-off deductions from NLNG payroll system, or must have been confirmed as a staff by NLNG. ii. No member shall have more than three loans (and one of the loans should be a targeted loan) run concurrently. The executive loan is a special advance that is not in this category and can be held with three other qualifying loans. Doc No: COOP/LN/0001 Revision: 4 Date: 10/08/2018 Page 3 of 9

4 iii. For a member on suspension from NLNG, no loans will be granted, but withdrawals can be made from savings provided his/her savings are not encumbered. iv. All applications for loan shall reach the NLNG-COOP Secretariat by (nlng.coop@nlng.com) or through our E-Loan application system on or before the 7th day of the month stating loan type, value of loan and repayment period. v. Loan application processing shall be between 7th - 28th day of the month. vi. Any beneficiary that defaults on the repayment of a loan shall be charged 1% flat rate on the balance of principal for each month of default in addition to the existing interest rate. This will now be charged on all targeted loan that exceed the repayment period. vii. A register of loan performance/defaulters shall be maintained by the NLNG-COOP, and sanctions applied as determined by the MC. Such may include bans from accessing NLNG-COOP loans for up to two years or any other measures as deemed appropriate. viii. Beneficiaries must ensure their total monthly commitment (net savings) at any time shall not exceed 33% of their net monthly pay. ix. To ensure availability of funds for other projects, henceforth the NLNG-COOP will only disburse loans to members to a maximum of 50% of NLNG-COOP receipts (contributions and loan deduction) in any particular month. Disbursement of loans to members shall be on "first come first serve" bases. Any loan application that meets application timing criteria and is not granted because of the maximum disbursable limit of 50% of NLNG-COOP receipts will be given first priority in the next month and will be granted subject to the maximum disbursable limit in the new month. x. Disbursement of qualified loan applications to members for the targeted loan shall be within 10 business days following the application, while that for the short-term emergency loan (STEL) shall be within 2 business days, both based on funds availability. Disbursement for all other loans shall commence on the 28th day of the month through the 7th day of the following month. xi. All disbursement of loan advances to members shall be on crossed cheque or direct credit to members bank account. xii. Where an applicant elects for an open cheque a flat bank charge of two thousand (N2,000.00) or 0.1% of the amount, whichever that is higher, shall be charged. xiii. An applicant shall be responsible for the accuracy of all information supplied by him / her. xiv. Except a waiver has been granted by the MC based on special circumstances e.g. pension voluntary contribution (VC) payments, repayment of loan amounts by applicants shall be by monthly deduction through NLNG payroll and the amount payable shall include both the principal plus applicable interest. xv. Loan repayment by a member who is a Secondee staff of NLNG, shall be through a standing order executed by that member from his/her banker in favour of the NLNG-COOP and such repayments shall cover the principal plus applicable interest. xvi. Any falsification of information will be dealt with accordingly by the NLNG-COOP Management Committee. 4.0 LOAN SCHEMES Doc No: COOP/LN/0001 Revision: 4 Date: 10/08/2018 Page 4 of 9

5 The table below shows a summary of the various loan schemes being administered by NLNG-COOP. Sections 4.1 to 4.6 provide the complete details. Loan Type Max Amount (N) Max Tenor Savings Required Interest Insurance (%) Short-Term Emergency Loan 250,000 2 months N/A 5% monthly N/A Household Equipment Scheme 2,000, months N/A 16% pa N/A Regular Loan 5,000, months 50% 12% pa N/A Car Scheme 5,000, months N/A 16% pa 1% Targeted Loan 25,000, months N/A 22% pa 1% Executive Loan 50,000, months N/A Driven by bank rate 1% 4.1 REGULAR LOAN i. Maximum loan available shall be 200% (i.e. double) of your total unencumbered savings (excluding share capital holding), subject to a maximum of five million naira (N5,000,000) ii. Loan tenor shall be for a period not more than thirty six (36) months iii. Interest rate applicable shall be 12% per annum. iv. No member shall have more than one regular loan running concurrently for him/her at any particular time. 4.2 TARGETED LOAN i. The maximum loan obtainable is twenty five million naira only (N25m). ii. Repayment of the loan principal shall be in equal instalments annually through NLNG payroll, while interest payment would be made monthly through NLNG payroll. iii. An applicant shall issue post-dated cheques for the principal sum and interest presentable on the 25th day of the month in which repayment is due to be held as collateral in case the deductions from payroll for the month targeted loan is repayable will be more than 33% of member s net monthly pay. Member is responsible for verifying that loan repayment is within the maximum payable amount by NLNG payroll. iv. The post-dated cheque will be returned back to the member if deductions are made via payroll. v. Where the loan still remains unpaid after a two (2) month grace period, the loan shall be classified as Doc No: COOP/LN/0001 Revision: 4 Date: 10/08/2018 Page 5 of 9

6 non-performing and bad loan recovery process shall be applied to recover outstanding loan. vi. This type of loan shall be targeted towards applicant s lump sum income from NLNG that are normally expected to occur between January and February e.g. leave allowance, transfer grant, 13th Month, Bonny Location Allowance or any other lump sum payment from NLNG. vii. Interest rate applicable shall be 22% per annum but may be varied as determined by the MC based on prevailing economic indices including bank rates, Treasury bill rates, monetary policy rates (MPR) etc. viii. The maximum period loan may be granted shall not exceed 60 months. ix. Disbursement of qualified loan applications shall be within 10 business days following the application, subject to funds availability x. NLNG-COOP shall deduct 1% from the applicant s loan amount to secure insurance cover with a reputable insurance company. 4.3 EXECUTIVE LOAN i. This loan shall be targeted towards house purchases or construction, and shall be rolled out at the discretion, and under the guidelines, of the NLNG-COOP. ii. The maximum loan obtainable is fifty million naira (N50m) which shall be supported with a repayment schedule provided also that the members loan portfolio with the NLNG-COOP does not exceed the minimum threshold of 33% (forty percent) of his/her monthly take home. iii. Interest rate shall be the driven by the ruling bank rate. iv. There shall be an administrative charge of 0.25% of loan amount deductible from loan prior to disbursement. v. The maximum period loan may be granted shall not exceed sixty (60) months. vi. Applicant can liquidate the loan before the expiration of loan tenure. vii. NLNG-COOP shall deduct 1% from the applicant s loan amount to secure insurance cover with a reputable insurance company. 4.4 CAR SCHEME i. Maximum loan obtainable is five million naira (N5m). ii. Interest rate applicable shall be 16% per annum. iii. Loan repayment period shall not exceed 36 months. iv. Any member who has benefited from the scheme shall not be eligible to reapply for another car under this scheme until after four (4) months of completing the payment of the previous loan. v. The vehicle shall be insured with a Comprehensive Insurance Policy and the cost of insurance shall be borne by the beneficiary and must be done with the NLNG-COOP s nominated Insurer with the NLNG- COOP as the first loss payee in any eventuality. vi. Where NLNG-COOP does not have any agreement with a dealer/vendor, or the vehicle the member is interested in is not available with the contracted dealer/vendor, the Coop shall make a cash disbursement to the member instead. In such instances, the Coop shall deduct 1% from the applicant s Doc No: COOP/LN/0001 Revision: 4 Date: 10/08/2018 Page 6 of 9

7 loan amount to secure insurance cover with a reputable insurance company PURCHASE / DELIVERY PROCESS i. A member visits the NLNG-COOP website to select a product and supplier. ii. Electronic request is sent to NLNG-COOP. This request shall be the basis for action, which shall be on first-come first-serve basis. iii. NLNG-COOP verifies that member has enough savings and is capable of paying via NLNG payroll. iv. NLNG-COOP advises supplier to issue a pro forma invoice based on the NLNG-COOP price to buyer. v. Buyer acknowledges the conditions as contained in the pro forma invoice to NLNG-COOP. vi. NLNG-COOP calculates monthly deductions based on applicable repayment period, prepares a report and submits to Director of Car Scheme. vii. Buyer (may be required to) complete(s) and submits a security form for item against default in payment (to the Director of car scheme). viii. Director issues a supply order to seller. ix. Car is supplied to destination as requested by buyer. x. Buyer acknowledges delivery from supplier at destination 4.5 THE HOUSEHOLD EQUIPMENT SCHEME i. The maximum loan obtainable is two million naira (N2m). ii. Interest rate applicable shall be 16% per annum. iii. The loan repayment period shall not exceed 12 months. iv. Beneficiary shall be required to obtain a pro forma invoice detailing the equipment and the shelf price from any of the NLNG-COOP designated HOUSEHOLD EQUIPMENT SHOPS. v. Beneficiary shall then submit the invoice so obtained to the NLNG-COOP Office for processing. vi. Upon processing by NLNG-COOP, the beneficiary shall be issued with a Purchase Award Letter, which shall be presented at the shop before any purchase can be made. vii. Without prejudice to the above provisions, any member who wishes to pay 100% of the shelf price of the equipment shall be entitled to a special discount rate from the NLNG-COOP. The special discount rate, which shall be at the discretion of NLNG-COOP, is primarily dependent on the volume of business. viii. The scheme covers all the equipment available in the shop. ix. Where NLNG-COOP does not have any agreement with a vendor, or the appliance the member is interested in is not available with the contracted vendor, NLNG-COOP shall make a cash disbursement to the member instead 4.6 SHORT-TERM EMERGENCY LOAN (STEL) i. The purpose of this loan is to meet short-term emergency needs. ii. Maximum loan obtainable is two hundred and fifty-thousand naira only (N250,000). iii. Repayment of the loan principal plus interest shall be on a one-off deduction through NLNG payroll. Doc No: COOP/LN/0001 Revision: 4 Date: 10/08/2018 Page 7 of 9

8 iv. An applicant shall issue a post-dated cheque for the principal sum and interest presentable on the 25th day of the month in which repayment is due to be held as collateral in case the deductions from payroll for the month STEL is repayable will be more than 33% of member s net monthly pay. v. The post-dated cheque will be returned back to the member if deductions are made via payroll. vi. Where the loan still remains unpaid after a two (2) month grace period, the loan shall be classified as non-performing and bad loan recovery process shall be applied to recover outstanding loan. vii. Interest rate applicable shall be 5% flat rate per month. viii. Disbursement of qualified loan applications shall be within 2 business days, subject to funds availability ix. The maximum period loan may be granted shall not exceed 2 months. 5.0 BAD LOAN Any loan that can no longer be serviced by the beneficiary according to the agreed schedule shall be regarded as a bad loan. Such situation may arise as a result of any or a combination of the following situations. i. Resignation of beneficiary from NLNG ii. Termination of beneficiary s employment by NLNG iii. Incapacitation of beneficiary due to ill health, severe accident etc. iv. Bankruptcy. v. Death of beneficiary. vi. Or any other condition that made the loan unserviceable as agreed by majority of MC members 5.1 BAD LOAN RECOVERY Where a loan becomes bad loan, the following procedure shall be adopted to recover the outstanding principal and any applicable interest. i. The balance of the principal and applicable interest shall be recovered from the member s cumulative monthly savings, share capital, Interest and dividends due to the member. ii. The Co-Op shall liquidate any asset of the member in its possession in a bid to recover the balance of the principal and applicable interest on the loan iii. In addition to (i) and (ii) above, NLNG-COOP shall notify NLNG HRE and HR of member s bad debt and in co-operation with NLNG HR Employees Relations offset the balance of the loan from the member s entitlements. iv. Where the loan was insured e.g. executive loan, NLNG-COOP shall file insurance claim from the insurance company for liquidation. v. In the event all the above cannot offset the loan, NLNG-COOP shall take any legal means possible to recover the loan. In such circumstance the beneficiary shall be required to pay all expenses incurred by NLNG-COOP while recovering the loan. Doc No: COOP/LN/0001 Revision: 4 Date: 10/08/2018 Page 8 of 9

9 6.0 UNDERTAKING As a beneficiary of NLNG-COOP loan scheme under this Procedure and as may be amended from time to time, I undertake to abide by all rules and regulations contained therein. I shall not be relieved of this entire obligation until the loan and all its interests are fully recovered by NLNG-COOP. In the event of default, I authorize NLNG- COOP to make deductions from my payroll to liquidate the loan. I declare that all information supplied by me during the course of processing my application is correct to the best of my knowledge and I shall be held liable for any misinformation at any time during the loan tenor. Doc No: COOP/LN/0001 Revision: 4 Date: 10/08/2018 Page 9 of 9