Overview

• Each regulated entity under a co-lending arrangement must retain a minimum 10% share of every loan on its balance sheet.
• Originating lenders may extend default loss guarantees of up to 5% of the outstanding loan amount to align credit risk incentives.
• All disbursements and repayments are required to pass through an escrow account maintained with a bank to ensure transparent transaction flows.
• Regulators impose a uniform asset classification system so that a Special Mention Account or Non-Performing Asset designation by one partner applies equally to the co-lender.
• Co-lending agreements must be formalized ex-ante and embedded in credit policies with detailed provisions on borrower criteria, fee structures and interest-rate blending.