Overdrafts and Term Loans FAQ

1. What is an Overdraft Facility?

An overdraft is a loan arrangement between the borrower and the bank whereby the bank extends credit to a maximum amount against which the customer can write cheques or make withdrawals. It refers to the amount of money borrowed that exceeds the deposits. An overdraft is a type of revolving loan where deposits (credits) are available for re-borrowing, and interest is charged only on daily overdraft (debit) balance.

What are the features of an Overdraft?

  • The facility is renewable on an annual basis.
  • The facility is secured by acceptable collateral, i.e. cash cover or legal mortgage.
  • Minimum loan amount is TZS 1 million and maximum is TZS 1 billion.

What documents must be submitted by the customer?

  • 3 years audited financial statements.
  • Management accounts.
  •  Projected cash flows.
  • Collaterals.
  • Business licenses.
  • Tax Identification Number (TIN).
  • Valuation report of the mortgaged property from the bank's approved valuer.
  • Proof of land rent paid to date
  • Memorandum & Articles of Association as well as current annual returns for limited companies.
  • Board resolution to borrow for limited companies.
  • List of stock and debtors.
  • Copies of Orders/ Contracts/ Tenders held or anticipated

Is there a check list for Overdraft facilities applications?

Yes, there is a check list for Team Loan facilities; you can visit our nearest NBC branch for more detailed information

2. What is Term Loan?

A Term loan is a loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate. Asset based short and medium term (usually for one to five years) loan payable in a fixed number of equal instalments over the term of the loan. Term loans are generally provided as working capital for acquiring income producing assets (machinery, equipment, inventory) that generate the cash flows for repayment of the loan.

What are the features of a Term Loans?

  • Term loans are available in TZS.
  • Repayment is deducted on a monthly basis from borrowers.
  • Period of repayment is between 6 and 60 months.
  • The facility is secured by acceptable collateral, i.e. Cash and Legal Mortgage.

 What documents must be submitted by the customer?

  • 3 years audited financial statements.
  • Management accounts.
  •  Projected cash flows for the period of loan.
  • Projected financial statement for the period of loan
  • Collaterals.
  • Business licenses.
  • Tax Identification Number (TIN).
  • Valuation report of the mortgaged property from the bank's approved valuer.
  • Proof of land rent paid to date
  • Memorandum & Articles of Association as well as current annual returns for limited companies.
  • Board resolution to borrow for limited companies.
  • List of stock and debtors
  • Business plan
  • Copies of Orders/ Contracts/ Tenders held or anticipated
  • Approved Building permit issued by relevant authority
  • Bills of quantities form from registered quantity surveyor

Is there a check list for Term Loan facilities applications?

Yes, there is a check list for Team Loan facilities; you can visit our nearest NBC branch for more detailed information.