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COOPERATION CHARETTE TERMS OF FINANCE
COOPERATION CHARETTETERMS OF FINANCE
TABLE OF CONTENT:
I. Definitions
II. General Provisions
III. Credit Requirements
IV. Application procedure
V. Credit Repayment and Defaulted payments
VI. Securities
VII. Sample Micro-credit Contract
Micro-credits available to Charette members are reg-ulated through the current TERMS OF FINANCE
as adopted and/or amended by the General assem-bly. Their provisions are binding to the members hav-ing received or applied for a grant of Charette’s financing.
A sample Micro-credit Contract is fur-ther attached to provide the basic terms and con-ditions under which micro-credits are granted.
DEFINITIONS
Evaluation committee –• a committee comprised of 3 expert persons,
specialists in a designated field, assigned by the Board to evaluate the
benefits of the proposed project and the price of the securities.
Financial revenue from micro-credits• – revenue from interest
earned, fees, and commissions (including late
fees and penalties) on the gross micro credit
portfolio only, including the accrued but non-
paid interest.
Number of micro–credits disbursed• - the
number of loans disbursed during a specific pe-
riod. Usually corresponds to the number of the
financed projects.
Performing portfolio• -the part of the gross micro-credit portfolio in-
cluding the value all outstanding micro credits which lack any delays in
repayment beyond 7 days and that have not been rescheduled or restruc-
tured. It does not include accrued interest.
Portfolio at risk • - the value of all outstanding micro-credits with one
or more installments of principal past due for more than 7 days. This in-
cludes the entire unpaid principal balance, including both past, due and
future installments, with no accrued interest. It also does not include
loans that have been restructured or rescheduled.
Securities• - any asset that equals or exceeds the micro-credit amount
and provides for its full and timely payment, such as:
Promissory notes issued to the benefit of Charette;•
Mortgages established in the name of Charette;•
Pledges over movable property (shares included •
herein);
Special pledges registered in the Registry for Spe-•
cial Pledges;
Receivables due by Charette to its members
do not fall within the definition of securities.
Value of micro-credits disbursed • - the value of all loans disbursed
during the period, regardless of whether they are performing, non-per-
forming, or written off.
\ \GENERAL PROVISIONS
As a way to pursue and achieve Charette’s aims, 1.
the latter provides its members with micro-cred-
its subject to the criteria below.
Charette’s micro-credits are used for further de-2.
velopment and promotion of design activities,
marketing and distribution of design products,
development of business projects and plans, as
well as any other activity considered appropriate
by the Board.
Charette provides only group members micro-credits to groups 3.
comprised of at least 3 members.
Repayment of Charette’s micro-credits could be:4.
1) with a fixed term of repayment;
- for up to 2 years;
- for up to 1 year;
2) with a rescheduled repayment;
- for up to 3 years;
- for up to 1.5 year;
\
5. Micro-credits are used solely for the purposes for which
they have been granted. Noncompliance with the micro-
credit purpose results in its accelerated repayment.
6. Charette maintains a Micro-Credit Register, posted on
its site, with the following information:
1) Value of micro-credits disbursed;
2) Number of micro–credits disbursed;
3) List of micro-credit receivers;
4) Performing portfolio;
5) Portfolio at risk;
6) Financial revenue from micro-credits;
7) Credited projects and their stage of development;
The data so presented is highly confidential.
MICRO-CREDIT REQUIREMENTS
Applicants are required to have completed Charette’s
micro-credit workshop.
Applicants, having completed the workshop, must provide the
following information:
• incomefortheproceedingyearandahalf(otherthan
Charette’s);
• repaymentcapacity;
• lackofbreachesinthemember’sobligations;
• businessplanoranoverviewofthecreditedproject;
• projectperspectiveincomes;
• typeofmicrocreditrepayment;
• micro-credit security (preferences between several
options);
\ \APPLICATION PROCEDURE
Micro credit availability, together with the up-1.
coming micro-credit workshop dates, are an-
nounced on Charette’s site.
Members applying for micro-credits are con-2.
sidered registered for the micro-credit work-
shop.
The application procedure is initiated at the entrance of the user-3.
name/password of one of the group members,
Each application comprises of 2 sections:4.
Applicants’ data:
• nameofmembersapplying;
• currentincomeofeachmembers;
• repaymentcapacityofeachmember;
• pastrepaymenttrackrecordofeachmember;
Projects’ data:
• businessplanoraprojectoverview;
• projectrealization;
• estimatedprojectcosts;
Further information is presented when appropriate.
\5. Applications together with the attached to them documents are
submitted to the Board by clicking the “submit” button located in the
right corner of the screen.
6. Applications are considered filed in with the Board from the mo-
ment of receiving a confirming e-mail. Its non-receipt equals non-ap-
plying for the micro-credit and non-registration for the workshop.
7. Amendments in the presented information reported to the Board
immediately but no later than the following 3 days.
8. Each application is processed separately by the Board within
2-weeks of its filing.
9. Approved applicants are invited to participate in the workshop.
10. Subject to the successful completion of the workshop, the Board
adopts a grounded resolution for micro-crediting the project up to a
certain percent. Applicants are notified of the resolution within 3 days
of its adoption.
11. Micro-credit Contracts are concluded within 7 days of the receipt
of the mail and subject to further negotiations held between the Board
and the respective members.
12. Concluded contracts are entered in the Micro-credit register
within 3 days through posting:
• micro credit amount;
• repayment day or schedule
• financed projects;
CREDIT REPAYMENT
and
DEFAULTED PAYMENT
Repayment of micro-credits is executed within the designated •
term(s), in the amount provided and through a bank transfer to
Charette’s bank account.
Fixed term contracts with a period of repayment for up to 2 •
years bear an interest determined by SOFIBOR + 2 points.
Fixed term contracts with a period of repayment for up to a year •
bear an interest determined by SOFIBOR + 1.2 points.
Long term loans with rescheduled repayment bear an interest •
determined by SOFIBOR + 3 points.
Short term loans with rescheduled repayment for up to 1.5 year •
bear an interest determined by SOFIBOR + 1.8 points.
Repayments are registered by the Board in the Micro-credit reg-•
ister.
The Board amends the entries in the Micro-credit register in •
case of error.
Default in the repayment of any of the due installments results •
in the micro-credit accelerated payment.
Defaulted members receive notice for the voluntary repayment •
of the credit within 3 days of the due term.
Non-payment within 10 days from the receipt of the invita-•
tion gives raise to the initiation of proceedings for exercising
Charette’s rights over the securities.
All disputes regarding micro-credits are heard by a Bulgarian •
state court of competence with the application of the Bulgarian
legislation.
SECURITIES
Micro-credits are secured through the establishment of securities to 1.
thebenefitofCharette.
Members’ dividends are set-off with micro-credit repayments up the 2.
amount of the smaller.
Securities are established in the name of Charette in the amount of 3.
their market price, as determined by the Evaluation Committee.
Devaluation of the established securities. In case of de-evaluation 4.
of the market price of the so established securities, the Board of Di-
rectorscouldask thereceiverof thefinancialgrant toestablished
an additional security up to the amount of the non-returned grant
together with the calculated upon it interest.
