The loan can be used to finance income-generating projects, and renovations as well as purchasing assets like school buses. The loan facility caters for (1) working capital loans (e.g. for income-generating projects and renovations) and (2) asset financing facilities (e.g. to purchase school buses, trucks and passenger vehicles).
Under this arrangement, the Bank remains the legal owner of the asset until it is fully paid up by the customer. Thus the Bank and the customer/school enter into a Lease Hire agreement whereby the school would be expected to pay agreed rentals (principal loan plus interest) for an agreed period of time. The asset will be comprehensively insured and the cost being borne by the customer.
Other operating costs such as maintenance and servicing of the asset will be borne by the customer. Upon full payment of the extended loan, ownership of the asset will be transferred to the customer.
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