Criteria For Providing Loans
Criteria for Providing Loans
CDT Foundation NPC (CDTF) (formerly Christian Development Trust) has assisted Churches and other Christian organisations for more than 30 years to build and buy properties. However in recent times the price of property has increased significantly as also the price of building materials and it is still our intention to help as many churches and others as possible.
To achieve this we will have to put a few guidelines in place.
- The members of CDTF are the member churches of the South African Council of Churches.
- Generally we only provide loans to congregations of our members or established ecumenical organisations. We certainly never provide loans to break-away groups.
- We are obliged to comply with the National Credit Act and other applicable legislation, e.g. Financial Intelligence Centre Act. In terms of the National Credit Act we are obliged to ensure that the borrower is able to repay the loan on our standard terms and conditions. We therefore study as a minimum past financial statements (normally audited), management accounts and future budgets. We may also require independent valuations.
- Our loans at present carry an interest rate of 8,5% p.a. and are for a period of 60 months (this requires a monthly repayment including capital and interest of R21 for each R1000 advanced).
- We lend on a secured basis and normally register first mortgage bonds over the property offered as security (this is normally the property which is being acquired and/or improved).
- The constitution documents of a borrower are carefully checked to ensure power and capacity to borrow without restriction and/or whether permission from members of a congregation in general meeting is required or that of a controlling body.
- As a general rule we do not provide 100% of the cost of the property. Loan to value ratios are however flexible depending on circumstances and other security which may be offered, e.g. suretyships by a “mother church” where congregations are the actual borrowers.
- Generally we do not need to prioritise loans but if we did we would give preference to a project which included a health or educational component.
- Our mission is to support churches and ecumenical organisations to proclaim the Gospel and therefore we need to ensure that our loans are focused clearly on our mission.