Purchasing Finance

Targets Licensed Micro and Small Businesses to finance their purchases of raw materials and/or goods, and/ fixed assets, and/or business-owned vehicles, therefore loan amount is paid to the vendor as per the client request

MICROPHONE

Voice over for Purchasing Finance

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Loan Amount : 1,000 – 75,000 JOD

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Grace Period : Not applicable

Payment Date

Payment Date : 1st of each month

Loan Term

Loan Term : 6 - 72 Months (according to loan amount)

Fees

Fees : 1 JOD per 1,000 and its fraction for the loan amount between 1,000-10,000 JOD, and 1% One-time commission for granting credit for the loan amount between 1,000-75,000 JOD

Penalties

Penalties : 0.5 JOD per each day of delay, for loan amounts (1,000 – 10,000 JOD), 5 JOD per each day of delay, for loan amounts (10,001 – 75,000 JOD)

Annual interest rate

Annual interest rate:

Amounts (JOD 1,000 – 3,000): Declining interest rate/annual of (31.6%) which is equivalent to fixed interest rate/annual of 18%

 Amounts (JOD 3,001 – 5,000):  Declining interest rate/annual of (26.7%) which is equivalent to fixed interest rate/annual of 15%

 Amounts (JOD 5,001 – 10,000):  Declining interest rate/annual of (21.5%) which is equivalent to fixed interest rate/annual of 12%

 Amounts (JOD 10,001 – 75,000):  Declining interest rate/annual of (20.5%) which is equivalent to fixed interest rate/annual of 11.4%

- Declining interest rate is indicative, the rate depends on the tenor of the loan.

Loan Purposes

Loan Purposes : Financing the business purchases of raw materials, and/or goods, and/or fixed assets. Financing Business-owned vehicles/scooters. Financing telecommunication services and technology and information technology services, and business digitalization. Fina

Added Value Services

Added Value Services : Aman: free service where the outstanding balance of the client's loan is paid in case of the death of client and in case of disability according to the approved disability schedule

* Age of the project should be 12 months and above 

* Targeted Segment is Licensed Micro and Small businesses including Commercial, Industrial, Service, productive Sectors, and vehicles used for business purposes.

* All kind of loans are subject to Stamps Fees Law and Sales Tax Law.

* Includes all persons as long as they are in full legal capacity and in line with the company’s policy and provisions.

* The company is obliged to grant funding only for legal purposes, and the fund is not granted for any kind of illegal purposes or purposes that entail environmental and social impact.

* Terms and conditions apply.

A client received a JOD 50,000 loan from Tamweelcom, with a tenor of 12 months and at a declining interest rate/annual of 20.4% which is equivalent to fixed interest rate/annual of 11.4%.

1-What is the total interest rate paid for the loan?

Total interest rate for the loan = 5,700 JOD

Stamps duty on the Contract = 150 JOD

One-time commission for credit granting = 500

2- What is the monthly payment for the loan (principal, interest and sales tax on interest)?

First month payment amount: 4,655 JOD (Principal 3,779.62 JOD, interest 849.9 JOD and sales tax on interest 25.479 JOD)

The remaining monthly payments amount: 4,656 JOD (Including principal payment, interest and sales tax on interest).

3-How to calculate the effective interest rate (EIR) for the loan

The effective interest rate (EIR) = (1+IRR)12 - 1

The Internal rate of return (IRR) calculated using Microsoft Excel by using the equation of IRR:

Value field: enter all the cash flows (plus and minus)

Guess field: (represent the expected income) enter 0

IRR = 0.01963

Which represent the Monthly Effective rate

The effective interest rate (EIR) calculated by substitute the IRR in the following equation:

The effective interest rate (EIR) = (1+IRR)12 - 1

The effective interest rate (EIR) = 26.273%

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