Project Criteria & Financing

NORSAD supports local financial institutions that will act as intermediaries for the delivery of financing to Small and Medium Sized Enterprises (SMEs). NORSAD support is through lines of credit, agency lines and guarantees.

• The intermediary must be well managed with a good performance track record, strong internal capacity and commitment to the development of SMEs.

•  All beneficiary projects should have positive development impact.   

 Financing Terms

Line of Credit

• Maximum amount USD 5 million
• Term: Maximum 7 years with grace period of up to 2 years on principal only
• Lending currency: EUR, USD, ZAR
• Interest rate: Fixed or variable market based, taking into consideration project risks involved
• Front-end fee of 1% (50% paid upfront)
• Commitment fee of 1% per annum
• Repayment: Quarterly on interest and principal
• Collateral: Assets of beneficiary SMEs and/or guarantees

 Agency Line

This is essentially an SME product where the local intermediary also acts as NORSAD's agent and  co-financing partner sharing the project risks.

• Maximum amount USD 5 million
• Term: Maximum 7 years with grace period of up to 2 years on principal only
• Lending currency: EUR, USD, ZAR
• Interest rate: Fixed or variable market based, taking into consideration Project risks
• Front-end fee of 1% (50% paid upfront)
• Commitment fee of 1% per annum
• Repayment: Quarterly on interest and principal
• Collateral: Project assets and/or guarantees

 Guarantee Line

• Guarantee up to 50% of realized losses on SME projects
• Maximum amount USD 5 million
• Term: Maximum 7 years
• Lending currency: EUR, USD, ZAR
• Guarantee fee: Based on market rates
• Front-end fee of 1% (50% paid upfront)
• Payment: Quarterly fees payments
• Collateral: Assets and/or guarantees from beneficiary SMEs, shared on proportional and pari passu basis