Notice 10/2024 on Credit Granting to the Real Sector of the Economy

PUBLISHED IN THE OFFICIAL GAZETTE, SERIES I, NO. 242, OF 20 DECEMBER 2024 NOTICE NO. 10/2024 SUBJECT: THE FINANCIAL SYSTEM

• Credit Granting to the Real Sector of the Economy
• Terms and conditions In light of the need to update the scope of implementation of the Notice on Credit to the Real Sector of the Economy, as well as to broaden the range of goods and services to be financed, it is imperative to revise Notice no. 10/2022, of 06 April, on Credit to the Real Sector of the Economy; In accordance with the provisions outlined in articles 36 of Law no. 14/21, dated 19 May, the Law on the General Regime of Financial Institutions, in conjunction with article 31 (f) and article 98 (1) (3) of Law no. 24/21, dated 18 October, the Law of the National Bank of Angola. I HEREBY DETERMINE: Article 1 (Object) The Notice establishes the terms and conditions that banking financial institutions must comply with when granting credit to the real sector of the economy, namely: a) The specificities applicable to said credit operations; b) The requirements of the credit operations to be granted.

CONTINUATION OF NOTICE NO. 10/2024 Page 2 of 9 c) The way in which credit operations are considered when mandatory reserves are being calculated. Article 2 (Scope)

1. This Notice applies to banking financial institutions within the scope of the activity of granting credit, in the modalities referred to in Article 3. It also applies to the following activities of cultivation, production and/or transformation of goods and the respective value chain: a) Agricultural production: i. Annual crops, namely maize, rice, wheat, sorghum, cotton, sisal, beans, soya, peanuts, sunflower, cassava, sweet potatoes, potatoes, yams and various vegetables; ii. Perennial crops such as coffee, cocoa, palm trees, citrus fruits, apples, bananas, pears, mangoes, guava, papaya and other fruit trees. b) Livestock production: i. Beekeeping; ii. Aquaculture; iii. Poultry farming; iv. Cattle farming; v. Goat farming; vi. Sheep farming; vii. Pig farming. c) Commercial fishing; d) Manufacturing and processing of: i. Foodstuffs, mainly agricultural; ii. Packaging; iii. Hygiene articles;

CONTINUATION OF NOTICE NO. 10/2024 Page 3 of 9 iv. Fertilisers and soil correction materials; v. Milk and dairy products; vi. Wood; vii. Construction materials; viii. Animal feed; ix. Common salt; x. Textiles and clothing. 2. The provisions of this article also apply to logistics, transport, conservation and the respective value chain, when associated with the production and/or processing of eligible goods. Article 3 (Modality and Purpose)

1. The credit granted by banking institutions in accordance with this Notice shall comply with the modality appropriate to its purpose, namely: a) Medium to long-term credit for investment, aimed at financing capital expenditure, with the amortisation period adjusted to the return cycle of the investment, and must consider the financial leasing modality; b) Short-term credit to strengthen cash flow, for the acquisition of raw materials and inputs from suppliers, especially local ones, whose terms should reflect the operational cycle of purchase and sale or the period until payment of the inputs. c) Factoring loans.
2. The provisions of subparagraph b) of the previous paragraph shall also apply to the acquisition of inputs for annual agricultural campaigns.

CONTINUATION OF NOTICE NO. 10/2024 Page 4 of 9 Article 4 (Criteria for Access to Credit)

1. Access to credit under the terms of this Notice is limited to bank customers who fulfil the following requirements: a) Be a company incorporated under the Companies Act, the One Person Companies Act and the Presidential Decree on Co-operative Companies. b) Have organised accounts and accounts certified by an accountant or expert accountant registered with the Angolan Charter of Accountants and Expert Accountants. c) Have a regular tax situation; d) Have proven experience or demonstrate the ability to manage and develop the activity for which they are applying for credit; e) Be a client of the financial institution from which they intend to take out the loan; f) Not be technically bankrupt in the last 2 financial years; and g) Have no record of non-compliance with CITC credits in the last 12 months from the date of submission of the request for financing, including companies with a group relationship and partners with qualifying holdings.
2. Without prejudice to the provisions of the preceding paragraph, the degree to which these requirements are met must be proportionate to the size and length of time the applicant organisation has been in business and the amount of credit requested.
3. In the case of co-operatives, the specific characteristics and risks associated with both the nature of the operation and the would-be borrower must be assessed.
4. In instances where the applicant organisation lacks demonstrable experience or the capacity to manage and develop the activity for which credit is being requested, it may utilise duly proven technical assistance.

CONTINUATION OF NOTICE NO. 10/2024 Page 5 of 9 Article 5 (Cost of Credit)

1. For the purposes of this Notice, the total cost of credit comprises the interest rate plus commissions.
2. The total cost of credit to be granted must not exceed: a) 7.5% (seven point five per cent) per year for investment credits; b) 10% (ten per cent) per year for loans used to acquire raw materials, inputs and factoring;
3. The costs associated with any public guarantee or insurance used to mitigate the credit risk must be paid by the borrower and are added to the cost of the credit referred to in the previous paragraph. Article 6 (Credit Risk Assessment and Management)
4. Banking Financial Institutions are required to formulate a policy for granting credit under this Notice. This policy must define risk assessment and management criteria appropriate to the nature, amount and characteristics of the credit, as well as for the constitution of the impairments required by the accounting standards in force.
5. Banking Financial Institutions must comply with the specific regulatory standards on assessing the creditworthiness of customers and deadlines for providing services and ensure continuous monitoring and preventive measures to mitigate the risk of default. Article 7 (Minimum Credit Requirements)

CONTINUATION OF NOTICE NO. 10/2024 Page 6 of 9

1. Each banking financial institution is required to ensure the disbursement of a minimum number of operations to new beneficiaries, according to the value of assets in the report and accounts for the previous financial year. The following indicators are used to define this: Total Net Assets Minimum number of new operations to be carried out Equal to or higher than Kz. 900 000,00 30 Equal to or higher than Kz. 400 000,00 25 Higher than Kz. 100 000,00 20 Up to Kz. 100 000,00 10
2. To fulfil the minimum requirements, credits granted are not eligible: a) Through the instrument of factoring; b) To holders of qualifying holdings in the creditor Commercial Bank and natural or legal persons related to them; c) To members of the management and supervisory bodies of the creditor Commercial Bank and their spouses, descendants or ascendants up to the second degree of lineage and to companies managed by them or in which they have a shareholding. Article 8 (Deduction of Mandatory Reserves)
3. Loans eligible to satisfy the requirement defined in paragraph 1 of the previous article shall be deductible from the value of the mandatory reserves to be established by each Banking Financial Institution, applying the following weightings: a) 100% (one hundred per cent) of the outstanding principal due and overdue for less than 90 (ninety) days, paid in accordance with article 3 (a) of this Notice;

CONTINUATION OF NOTICE NO. 10/2024 Page 7 of 9 b) 60% (sixty per cent) of the outstanding principal due and overdue for less than 90 (ninety) days, disbursed under Article 3 b) of this Notice; c) 50% (fifty per cent) of the principal amount of any Loans overdue more than 90 (ninety) days or restructured as a result of the Customer's financial difficulties, granted under this Notice and the previous ones; 2. Without prejudice to the provisions of the preceding paragraphs, credit operations in situations of default for a period of 180 days or more shall not be deducted from the amount of mandatory reserves to be set aside by each banking financial institution until the operation is duly normalised, in accordance with the agreement between the commercial bank and the customer. Article 9 (Exceptional Deduction from Mandatory Reserves)

1. The National Bank of Angola may, exceptionally, at the request of a banking financial institution, authorise the deduction of restructured credits from the mandatory reserves with a higher weighting than that provided for in Article 8, in the case of projects considered relevant to the economy.
2. The exceptional authorisation referred to above shall be limited to credits linked to projects of strategic importance for regional development and shall exclude credits granted in the manner provided for in Article 3(b) and (c) of this Notice.
3. In order to implement this authorisation, specific weighted coefficients will be established, applicable according to the specific characteristics of each case.

CONTINUATION OF NOTICE NO. 10/2024 Page 8 of 9 Article 10 (Reporting)

1. Banking Financial Institutions shall report to the National Bank of Angola information on loans granted under this Notice, in the format established by specific regulations.
2. For the purpose of requesting a deduction from the mandatory reserves, the Banking Financial Institutions must provide the National Bank of Angola with the following information, and the National Bank of Angola may request any additional information it deems necessary: a) Loan agreement, only at the time of the first disbursement; and b) The statement evidencing the disbursements and instalments, whenever they occur. Article 11 (Information Publication) Banking Financial Institutions shall keep information on the requirements for access to credit under this Notice, including an up-to-date list of the documents and other information that the customer must provide for this purpose, prominently displayed on the institution's website. Article 12 (Deadline for Compliance or Explanation)
3. From the date of entry into force, Banking Financial Institutions shall have a period of 12 months to comply with the minimum requirements of this Notice, which shall be renewed at the end of each cycle.
4. Banking Financial Institutions that have not achieved the annual targets set out in this Notice must justify the reasons for this within a maximum of 22 working days after the end of the cycle.

CONTINUATION OF NOTICE NO. 10/2024 Page 9 of 9 Article 13 (Revocation) Notice no. 10/22, of 6th April, on the Granting of Credit to the Real Economy Sector and the respective Circular Letters, is hereby revoked. Article 14 (Doubts and Omissions) Doubts or omissions arising from the interpretation and application of this Notice shall be settled by the National Bank of Angola and should be sent to the following e-mail address dro@bna.ao. Article 15 (Sanctions) Failure to comply with the provisions of this Notice constitutes an offence provided for and punishable under Law No. 14/21 of 19 May, the Law on the General Regime of Financial Institutions. Article 16 (Entry into Force) This Notice shall enter into force on the date of its publication. BE IT PUBLISHED Luanda, 27th December 2024 THE GOVERNOR MANUEL ANTÓNIO TIAGO DIAS