Resolution No. CD-SIBOIF-707-3-DIC14-2011
Dated 14 December 2011

REFORM STANDARD OF ARTICLES 39, 40 and 42 OF THE STANDARD ON EVALUATION AND CLASSIFICATION OF ASSETS FOR THE PRODUCTION DEVELOPMENT BANK

The Board of Directors of the Superintendency of Banks and Other Financial Institutions,

WHEREAS

I That the timely evaluation and classification of the risk assets of financial institutions constitutes the most appropriate instrument to preventively determine their solvency.

II That the evaluations and classifications of risk assets should, as far as possible, adapt to international and Central American standards, as well as consider the particularities of the country's banking system and legislation.

III That in accordance with article 33 of Law 640, Law Creating the Production Development Bank (Produzcamos), it establishes that the Board of Directors of the Superintendency of Banks shall issue a special standard to regulate the matter of asset and portfolio classification.

IV That Law No. 645, Law for the Promotion, Development and Growth of Micro, Small and Medium Enterprises (MIPYME LAW), establishes in its article 24, that the Superintendency of Banks and Other Institutions must regulate everything concerning the creation of credit for MIPYMEs. Therefore it is necessary that the classification, evaluation criteria and other provisions of the standard apply to credits for micro, small and medium enterprises.

V In accordance with the foregoing and based on article 3, numerals 3 and 13, and article 10, numeral 7, of Law 316, Law of the Superintendency of Banks and Other Financial Institutions, and its reforms contained in Law 552, Law of Reforms to the aforementioned Law 316.

In use of its powers,

HAS ISSUED

Resolution No. CD-SIBOIF-707-3-DIC14-2011

The following standard,

REFORM STANDARD OF ARTICLES 39, 40 and 42 OF THE STANDARD ON EVALUATION AND CLASSIFICATION OF ASSETS FOR THE PRODUCTION DEVELOPMENT BANK

FIRST: Reform articles 39, 40 and 42 of the Standard on Evaluation and Classification of Assets for the Production Development Bank, contained in Resolution No. CD-SIBOIF-624-2-ABR21-2010 dated 21 April 2010, published in La Gaceta, Official Gazette No. 130, of 09 July 2010, which shall read as follows:

Art. 39 Information requirements for microcredit.- For microcredit operations, the bank must require, before approving the operation, the information established by its own credit technology, which must consider and evidence, at a minimum, the following:

a) Identity document;

b) Address of the business or domicile, as applicable;

c) Credit application in which the amount, term and form of payment must be stated;

d) The client's activity and its situation in the market it serves, evaluating the risk of the business and its family environment;

e) Length of time the business has been operating and experience in the business;

f) Source of income;

g) Financial situation and projected cash flows, prepared by the Bank's credit analyst, evidencing the debtor's equity and payment capacity;

h) Payment history of debts with suppliers and other creditors;

i) The documentation showing that the guarantees are valued and registered or documented as constituted, when applicable;

j)
Evidence of having consulted the Superintendency's Risk Center and the Private Risk Centers with which the Bank has agreements; k) Reports of visits to the debtor's business made by the credit analyst, the supervisor and/or the Bank's recovery personnel; and l) Any other documentation or information required by the bank's credit policy or technology, which will depend on the debtor's economic activity (productive, services, agricultural and industrial) and its target market (export, domestic market, wholesale or retail).

All the documentation and information required in this article must be evidenced by the Bank.

Art. 40 Information requirements for SME credits.- For SME credit operations, the bank must require, before approving the operation, the information established by its own credit technology, which must consider and evidence, at a minimum, the following:

a) Identity document;

b) Address of the business or domicile, as applicable;

c) Credit application in which the amount, term and form of payment must be stated;

d) The client's activity and its situation in the market it serves;

e) Source of income;

f) Projected cash flow based on the requested term and form of payment, which must include debts with the Financial System and be supported with its respective calculation memorandum;

g) Pro-forma financial statements (balance sheet and income statement) and projected cash flows evidencing the debtor's equity and payment capacity;

h) Payment history of debts with suppliers and other creditors, if any;

i)
The documentation showing that the guarantees are valued and registered or documented as constituted, when applicable; j) Evidence of having consulted the Superintendency's Risk Center and the Private Risk Centers with which the Bank has agreements; and k) Any other documentation or information required by the bank's credit policy or technology, which will depend on the debtor's economic activity (commercial, services, agricultural and industrial) and its target market (export, domestic market, wholesale or retail).

All the documentation and information required in this article must be evidenced by the Bank.

Arto. 42 Identification of persons linked to debtors.- It is the responsibility of the bank to implement a methodology to identify natural or legal persons linked to its debtors, and must complete Annex No. 1 (Legal Person Debtor) and Annex No. 2 (Natural Person Debtor), "Linked Parties", which are an integral part of this standard, for those debtors whose loans are equal to or greater than the equivalent in national currency of fifty thousand United States dollars (U$50,000.00).

SECOND: Repeal Annex 1 of the Standard on Evaluation and Classification of Assets for the Banco de Fomento a la Producción, contained in Resolution No. CD-SIBOIF-624-2-ABR21-2010 dated 21 April 2010, published in La Gaceta, Diario Oficial No. 130, of 09 July 2010,

THIRD: Amend Annex 2 of the Standard on Evaluation and Classification of Assets for the Banco de Fomento a la Producción, contained in Resolution No. CD-SIBOIF-624-2-ABR21-2010 dated 21 April 2010, published in La Gaceta, Diario Oficial No. 130, of 09 July 2010, which must be read as follows:

ANNEX 1

LINKED PARTIES (LEGAL PERSON DEBTOR)

Client Code

Financial Institution:
Debtor 1/:
Registry Data
RUC 2/:

Name	Identification No.	Identification Type	Type of Link	% of Shareholding	Position Held in the Entity	Country of Residence	Observations

Name and Signature of the debtor

[1/] This annex must be submitted for each legal person debtor.

[2/] In the case of Nicaraguan citizens, indicate the identity card number issued by the Supreme Electoral Council; for foreigners residing in Nicaragua, the registration number of the residence card issued by the General Directorate of Migration and Immigration must be indicated; in cases where the reported persons reside outside Nicaragua, the passport number and country of residence must be indicated; and in the case of a legal person, the RUC number or its equivalent.

Information to be provided on linked legal persons

Name: Name of the natural or legal person that has a significant link with the debtor in accordance with the provisions of numeral 2 of both article 55 and article 56 of the General Banking Law.

Identification No.: The identification number must be indicated.

Identification Type: Type of document to which the identification number used by the natural or legal person corresponds, as required by the standard governing the matter of the Credit Information Center of the Superintendency).

Type of Link: The type of link that the natural or legal person has with the debtor must be specified, in accordance with the criteria established in article 55 of the General Banking Law and in the regulations governing the matter of Concentration limits. If the link is shareholding, the percentage of participation must be specified in the following column.

% of Shareholding: Indicates the number expressed as a percentage of the participation of the shareholder, whether a natural or legal person.

Position held in the entity: Corresponds to the name of the position held by the related party within the entity detailed. If no position is held, it must be specified in quotation marks; "N/A" (NOT APPLICABLE).

Country of Residence: The country in which the natural or legal person is located must be specified.

ANNEX 2

LINKED PARTIES (NATURAL PERSON DEBTOR)

Financial Institution:
Date of this report:
Debtor:
Position:
Date of Birth:
Identification No. 3/:

Degree and Nature of the link	First Name 1/	Middle Name 1/	First Surname 1/	Second Surname 1/	Date of Birth 2/	Identity Card 3/	Country of Residence 4/	Observations	Indicate Link with legal persons
Grandparents
Parents
Siblings
Spouse
Children
Grandchildren
Spouse's Grandparents
Parents-in-law
Siblings-in-law
Son-in-law/Daughter-in-law
Grandchild's Spouse

Name and Signature of the debtor

Information to be provided on related natural persons

[1/] Do not abbreviate, nor omit names or surnames. Married surnames should also not be included unless, in accordance with a legal requirement, the substitution of the maiden surname for the married surname is mandatory; in such cases, it must be expressly clarified. In cases where the person does not have a second name or second surname, it must be clearly indicated "Does not have".

[2/] In all cases, dates of birth must be indicated, including for minors, in a uniform format (Example: day-month-year)

[3/] In the case of Nicaraguan citizens, indicate the identity card number issued by the Supreme Electoral Council; for foreigners residing in Nicaragua, they must indicate the residence card registration number granted by the General Directorate of Migration and Foreigners; and in cases where the reported persons reside outside Nicaragua, the passport number and country of residence must be indicated.

[4/] The country where the related person is domiciled must be indicated.

[5/] Indicate whether or not there is a relationship with a legal entity. If affirmative, complete the form on legal entities related to the debtor (natural person)

In all cases, as established in article 55 of the Banking Law, they must report relatives up to the second degree of consanguinity and second degree of affinity, as detailed in this annex. When none of the mentioned relationships exist, it must be clearly indicated: "Does not have". Cases of deceased persons, minors, or others must be clearly indicated.

Financial Institution:
Debtor 1/:
Position:
Date of Birth:
Identification No. 2/
:

Name of the Entity	Identification No.	Type of Identification	Type of Relationship	% of Shareholding	Position Held in the Entity	Country of Residence	Observations

Name and Signature of the debtor

[1/] This annex must be submitted for each debtor, as well as for the natural persons that make up their unit of interest.

[2/] In the case of Nicaraguan citizens, indicate the identity card number issued by the Supreme Electoral Council; for foreigners residing in Nicaragua, they must indicate the residence card registration number granted by the General Directorate of Migration and Foreigners; and in cases where the reported persons reside outside Nicaragua, the passport number and country of residence must be indicated.

Information to be provided on related legal entities

Name of the Entity: Indicate the corporate name of the legal entity, national or foreign.

Identification No.: Indicate the Single Taxpayer Registry (RUC) number or similar.

Type of Identification: Specify the type of document to which the identification number used by the legal entity, national or foreign, corresponds.

Type of Relationship: Specify the type of relationship that the natural person has with the legal entity, in accordance with the criteria established in article 55 of the General Banking Law and in the regulations governing concentration limits. If the relationship is shareholding, the percentage of participation must be specified in the following column.

% of Shareholding: Indicate the number expressed as a percentage of participation that the related party (natural person) has in the legal entity detailed.

Position held in the entity: Corresponds to the name of the position held by the related party within the entity detailed. If no position is held, specify in quotation marks; "N/A" (NOT APPLICABLE).

Country of Residence: Specify the country in which the entity is domiciled.

FOURTH: This regulation shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette. (f) A. Rosales B. (f) V. Urcuyo V. (f) Gabriel Pasos Lacayo (f) Fausto Reyes B. (f) illegible (Silvio Moisés Casco Marenco) (f) U. Cerna B. Secretary.

URIEL CERNA BARQUERO
Secretary Board of Directors SIBOIF

RELATED PARTIES (DEBTOR NATURAL PERSON)