National Bank of Angola rules that banks must apply differentiated interest rates

30 April 2019

Commercial banks operating in Angola will have to apply differentiated interest rates to their clients, under Instruction 04/2019, of 26 April, released on Monday in Luanda by the National Bank of Angola (BNA).

The document, which comes into force 30 days after the date of its publication, sets out that interest rates should be established according to the specific risk classification of each operation, determined, among other things, on the level of risk assigned to each client, the characteristics of the product and the guarantees provided.

The preamble of the Instruction, which also prevents the granting of credit in national currency with the capital indexed to a foreign currency, sets out that it is based on the need to establish guidelines on the terms and conditions of credit agreements and procedures for the assessment of customers’ creditworthiness.

The BNA also ruled that home loan agreements should not be for longer than 30 years and that consumer credit should not exceed five years.

The document also stipulates that the Loan-to-Value ratio of a property must not exceed 90% for own and permanent housing and 80% for other purposes.

However, this percentage rises to 100% when it comes to the acquisition of real estate assets owned by the banks themselves or in the case of real estate leases.

The Instruction further determines that when contractual changes result from the customer’s financial difficulties, banks may not increase credit charges by raising the interest rate or by charging commissions or expenses related to the restructuring of the loan. (Macauhub)

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