NATIONAL BANK OF ANGOLA: Instruction on Good Practices in Granting Credit

National Bank of Angola issued the following announcement on April 29.

Considering the need to promote responsible lending, minimizing the risk of default and thus ensuring resilience of the financial sector and consumer protection of financial services, the National Bank of Angola published Instruction 04/19 establishing terms, conditions and procedures to be observed by the banking financial institutions in the granting of credit, of which the following stand out:

• Duty to carry out an adequate assessment of the client's financial capacity and his propensity to comply with the credit agreement, prior to its conclusion and prior to any increase in the total amount of the credit, taking into account its present circumstances and future changes may occur;
• Need to determine interest rates applicable to credit agreements based on the overall credit risk of the operation and not only on the product; 
• Preferential use, in the case of variable rates, of an indexer commonly used in the same currency of the credit, which for the national currency is LUIBOR, and the indexer term should correspond to the interest payment period;
• Definition of a maximum maturity for personal credit of 5 years, and the limit established in Presidential Decree 259/11 of September 30, for housing loans, namely 30 years;
• Definition of the maximum amount that can be granted in a mortgage loan, based on the value of the property to be financed;
• Prohibition of the granting of credit in national currency with capital indexed to a foreign currency;
• Prohibition of the concession of credit conditioned to the acquisition of other financial products or services marketed by the Financial Institution;
• Duty to implement customer follow-up procedures in order to be able, in a timely manner, to detect the probability of default in the payment of benefits under a credit agreement and to define appropriate measures after any default has occurred;

Original source can be found here.