Act 6 Borrowing Companies Act, 1969 PART III - FINANCIAL
Section 20. Unsecured loan, etc., not to exceed five thousand dollars.
(1) A licensed borrowing company shall not grant to any person an unsecured advance, loan or credit facility which in the aggregate at any one time exceeds five thousand dollars.
(2) In sub-section (1), the expression "unsecured advance, loan or credit facility" means -
(a) an advance, loan or credit facility made without security; or
(b) an advance, loan or credit facility secured only by a guarantee or guarantees; or
(c) any part of an advance, loan or credit facility secured by tangible assets which exceeds-
(i) in the case of a charge of immovable property the amount charged or the market value of the charged property whichever is less; or
(ii) the market value of any property other than immovable property,
but where the Central Bank is satisfied that there is no established market value, the valuation approved by the Central Bank.
(3) All the directors of a licensed borrowing company shall be liable jointly and severally to indemnify the licensed borrowing company against any loss arising from the making of an unsecured advance, loan or credit facility in contravention of sub-section (1).
