FUNDED PARTICIPATION

AGREEMENT
BETWEEN
ABC BUSINESS CONSULTING PLC
AND
EFH

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 THIS FUNDED PARTICIPATION AGREEMENT is dated October ______________,2023 and made
between ABC BUSINESS CONSULTING PLC AND EFH

I. PARTIES TO THE AGREEMENT:

ABC Business Consulting PLC, a Private Company Limited by Shares, with a company code
0074412163, incorporated on 30/11/2013 (Ethiopian calendar), legally represented by Sara Leedom,
the Shareholder representative, holder of a US,Passport number 531249043, and Julienne Oyler with a
US Passport number 487283208, hereunder referred to as “ABC Ethiopia”; on the one part, and

EFH is a nancial institution licensed by the National Bank of Ethiopia, with NBE license No. MFI/
039/2014 to provide nancial services including Mobile and agent banking services, having its
registered of ce at Addis Ababa, Ethiopia, Kirkos Sub-City, Woreda 02 hereunder referred to as
“EFH,”; on another part.

Hereinafter, ABC Ethiopia and EFH shall also be known individually as “Party” and together as
“Parties” to this Agreement.

THE PARTIES AGREE as follows:

II. PURPOSE
The Purpose of this Agreement is to establish the terms and conditions on which EFH, would provide
Investment or Loan to a Borrower using the capital provided by ABC Ethiopia.

III. APPLICABILITY
The terms and conditions contained in this Agreement apply to all Investments by ABC Ethiopia with
EFH grants to ABC Ethiopia a participation in the full amount of the relevant Investment subject to
the terms and conditions contained in this Agreement.

IV. DEFINITIONS
A. Borrower” means an entrepreneur, refugee, cooperative, or company established in the
territory of Ethiopia, which satis es the appropriate eligibility criteria outlined in this
agreement (as hereinafter de ned) and to which ABC Ethiopia proposes to make an
investment through EFH.
B. "Credit- or Financing Agreement" means the documents to which an investment relates,
including all schedules and appendices, any amendments, supplements, accessions, waivers or
variations to that Credit or Financing Agreement and all guarantee, security, inter-creditor and
restructuring documentation relating to that Credit or Financing Agreement.

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 C. “Disbursement Date” means the date on which the Investment Amount is available in cash
to the Borrower in the account designated by the Borrower or an asset is purchased in the
name of the borrower pursuant to the Credit or Financing Agreement.

D. “Investment Amount” means the exact amount a Borrower will receive or the amount an
asset is purchased on the behalf of the borrower as approved by ABC Ethiopia.
E. "Pro t Income" means, unless the context otherwise requires, all Pro t income received by
or accruing to the Parties in respect of any Investment.

F. “Pro t rate” means the rate at which the Borrower accesses nancing.

G. “Interest Free Financing [IFB] Products” means a set of investing terms and Financing
Agreements that follow Sharia guidelines and principles, mostly of pro t and loss sharing or
inventory purchase agreements.

H. “Investment” means the principal amount and related Credit or Financing Agreements made
or to be made to Borrower from ABC Ethiopia under this Agreement or the principal amount
outstanding of that investment.
I. "Loan or Financing" means the principal amount and related Credit or Financing
Agreements of any Investment made or to be made to Borrower from ABC Ethiopia under
this Agreement or the principal amount outstanding of that investment.
J. ”ETB" means Ethiopian Birr, the lawful currency of Ethiopia.

V. CREDIT TO EFH
A. shall apply any capital so received by ABC Ethiopia to fully fund such Loans and Investments
on the Agreed Disbursement Date and with the terms applicable in the Credit Agreement.
B. Upon Termination of this Agreement, EFH will return the deposited sum, less any amounts
Defaulted by Borrowers of various Investments provided by EFH to Borrowers.

VI. INVESTMENTS TO BORROWERS

A. ABC will determine the amount of Investment and terms of that investment after completing
due diligence and Investment Committee meetings upon its own terms with its own staff and
will bear all costs related to such due diligence and decisions.
B. On a monthly basis, ABC Ethiopia will provide in writing the list of approved Borrower
investments, meeting ABC standards, including Borrower name, contact information, banking
information, and any supporting due diligence requested by EFH.
C. Current ABC Ethiopia terms and due diligence processes can be found in Appendix 1 of this
contract. ABC Ethiopia reserves the right to alter its due diligence processes and borrower
pro le at any time for any reason. If ABC Ethiopia changes its terms, it will notify EFH
within ten (10) business days.
D. EFH Credit Committees will review all ABC Ethiopia approved Borrower investments within
a period of ve (5) business days or less after receipt by the EFH per the eligibility criteria of
ABC attached on Appendix 1

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 E. EFH requests for further clarity must be communicated to ABC Ethiopia within three (3)
business days of receipt of the list of disbursements.
F. Upon review from EFH for compliance with its licensure protocols, EFH will nalize the
Credit or Financing Agreement – Interest Free Banking [IFB] Financing Product terms - with
the Borrower with approved ABC Ethiopia terms. As the Lender of Record, EFH will then
disburse ABC Ethiopia capital to the Borrower by purchasing the asset on behalf of the
borrower.
G. While it is the intention of ABC Ethiopia to provide a list of Borrowers to EFH on an on-
going basis for Investment, ABC Ethiopia shall be under no obligation to make any
Investment and may in its absolute discretion decline to make any Investment.
H. In the event that the full amount of a Disbursement is not applied to fund an Investment on
the agreed Investment Disbursement Date, EFH must immediately return to ABC Ethiopia an
amount equal to the amount of the Disbursement that was not so applied to the Borrowers.

I. EFH must immediately on ABC Ethiopia’s written demand return any amount equal to the
un-obligated capital amount to the Receiving Account if ABC Ethiopia con rms to EFH that
it considers there are good reasons for it not wishing for the capital to be used by EFH to
fund the relevant Loans.

VII. COST OF INVESTMENT

A. The cost to a Borrower of entering in into a Financing Agreement (pro t ratio) with EFH
under this Agreement is not to exceed a rate described below or its corresponding pro t
sharing rate per annum per Investment.
i. Investment Amount
The Investor agrees to invest for the rst will be a total amount of USD 500,000 (Five
Hundred Thousand) in accordance with the terms and conditions set forth in this
contract.

ii. Pro t Margin

The pro t margin based on the duration of the investment. The pro t margin shall be
calculated as a percentage of the invested amount. The pro t margin rates for different
durations are as follows:

iii. 10% for 6 Months: For 6 months of investment, the Borrower shall pay a pro t
margin of 10% of the invested amount.

iv. 18% for 12 Months: For 12 months of investment, the Borrower shall pay a pro t
margin of 18% of the invested amount..

v. 24% for 24 Months: For 24 months of investment, the Borrower shall pay a pro t
margin of 24% of the invested amount.

B. No other costs from either ABC Ethiopia or EFH will be applied to the Borrower, including
administrative, loan initiation, or any other processing fees.
C. ABC Ethiopia and EFH are each liable for their own operating costs for the administration of
the Investment or Loan made to each Borrower under this Agreement.

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 D. ABC will perform repayments follow up in partnership with EFH to reduce the instances of
Borrower default. ABC Ethiopia will bear the cost of default in the instance that a Borrower
ceases to repay any portion of the outstanding loan or Investment amount.

E. National Bank of Ethiopia’s [NBE] rules and regulations regarding the status of the loan
determines the status of a loan including if a Financing agreement is in default. In the instance
of disagreement between ABC Ethiopia’s terms with its investor, NBE’s regulation will
prevail.
F. Neither party will levy a fee on a Borrower who repays their principal amount earlier than
anticipated (i.e. no pre-payment penalty)

VIII. ADMINISTRATION OF PAYMENTS FROM BORROWERS

A. Subject to the terms of this Agreement, EFH as lender of record shall be entitled to receive
and recover all principal, Pro t and other money payable with respect to the Investments
made under this Agreement.
B. Both parties shall share the pro t gained from the clients
C. Payments of Principal- Upon receipt of Investment principal, EFH will immediately account
100% to ABC Ethiopia as return of its principal.
D. Each party shall pay the full amount of taxes required to be deducted or withheld to the
relevant taxation or other authority within the time allowed for such payment under
applicable law. At this writing, each Party will be liable for timely payment of income tax on
their Party’s portion of Pro t or fees received from a Borrower.

E. In respect of each Investment, EFH is not entitled to reinvest any amount of principal
received by it unless directed by ABC Ethiopia in writing.
F. Currency - The currency of record for any Investment shall be Ethiopian Birr (ETB). If any
payment of principal or pro t above is made other than in ETB, EFH shall immediately
notify ABC Ethiopia and shall follow ABC Ethiopia’s written instructions as to whether and
how to accept, reject, convert or otherwise treat the payment.
G. All payments or deposits by either Party to, or with, the other under any Investment shall be
made in immediately and freely available cleared funds.
H. The account in which Pro t or Principal is held will be clearly labelled as an account for
“Funds in Trust for ABC Ethiopia”, or any other label instructed by ABC Ethiopia; will be set-
up to only receive funds relating to Investments, including principal and pro t payments from
Borrowers; will not be commingled with any funds belonging to any other third party; and
EFH will take all reasonable steps to protect such funds from additional claims.

IX. INFORMATION ACCESS AND DOCUMENTATION

EFH shall:
A. Ensure that ABC Ethiopia shall have full visibility of the end-to-end transfer of all funds
involved in each Investment;

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 B. Allow ABC Ethiopia to access accurate and up to date accounting and other records in
relation to all Investments and payments; and
C. Provide weekly or monthly reports as needed to ABC Ethiopia with respect to each
Investment in such format, with such content and with such regularity as may be required by
ABC Ethiopia;
D. EFH shall promptly provide ABC Ethiopia with copies of communications and documents it
receives under the Credit Documentation applicable to such Investment as applicable or
requested, including (in each case and without limitation): details of deadlines for the
submission of claims; the status of any noti cations to any insolvency of cer; and the status
of any lings of any proof of debt or other claim against the Investment or Borrower.
E. EFH will submit to ABC Ethiopia reports on the Funded Participation Agreement on the 10th
day after the end of each month, using the Gregorian calendar.
F. EFH and ABC Ethiopia shall maintain investment/loan records, including any and all
communication from bene ciaries, for the whole period this partnership is valid, and for a
period of three years after the nal payment of each investment.
G. ABC Ethiopia reserves the right to ask for any documentation of a Borrower either from EFH
or the Borrower at any time for any reason.
H. Both EFH and ABC Ethiopia shall endeavor to exchange and le all records electronically.

X. STATUS OF PARTICIPATION
A. The relationship between EFH and ABC Ethiopia under each Investment is that of joint
participants in an Investment Agreement with a Borrower, with the right of ABC Ethiopia to
receive monies from EFH equal to the relevant portion of any monies received by EFH in
relation to an Investment and Pro t applicable to that Investment.
B. In respect of each Investment, ABC Ethiopia shall not be substituted in respect of EFH’s
claims by virtue of any payment under that Investment and ABC Ethiopia shall have no direct
contractual relationship with or rights against any Borrower or other party to the Credit
Documentation applicable to that Investment (except EFH ) by reason of that Investment.
C. Nothing in any Investment constitutes EFH as agent, duciary, trustee or custodian for ABC
Ethiopia.
D. EFH shall not, without the prior written consent of ABC Ethiopia, exercise or refrain from
exercising any or all of its rights, powers and discretions arising under or in connection with
the Credit Documentation applicable to that Investment, or agree to any variation or waiver of
the terms of the Credit Documentation applicable to that Investment.

XI. INDEMNITY
A. ABC Ethiopia shall have no recourse to EFH if any Borrower fails to comply with its
obligations under the Credit Documentation applicable to such Investment;
B. EFH shall not be liable to reimburse or otherwise be responsible for, any losses directly or
indirectly sustained or incurred by ABC Ethiopia in connection with a defaulted Investment;

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 C. EFH shall, forthwith on demand, indemnify ABC Ethiopia against any loss or liability (other
than any loss or liability resulting from the negligence or willful misconduct of ABC
Ethiopia) which ABC Ethiopia incurs as a consequence of any breach by EFH of its
obligations or representations under any Investment.
D. EFH shall indemnify, defend and hold ABC Ethiopia and its of cers, directors and
employees and agents harmless from and against any liability, claim, cost, loss, damage or
expense (including, without limitation, reasonable legal fees and disbursements and VAT
thereon), or judgments which they (or any of them) incur or suffer as a result of EFH ’S
breach of any of the provisions of this Agreement.

XII. ASSIGNMENT AND TRANSFER

Neither Party may assign its rights or transfer its rights and obligations under any Investment to a
third party without express written agreement from the other Party.

XIII. TERM
This Agreement commences from the date of its signature by both Parties.
The Agreement will terminate upon the third (3) year anniversary of the signing of this Agreement,
with an automatic two (two) year extension unless either party noti es termination to the other party
in writing.
Both parties may agree to a renewal of terms at that time.

XIV. DEFAULT OF AGREEMENT AND TERMINATION

A. Either party can terminate with 6 (six) months advance written noti cation without cause.
B. The Parties, however, may also terminate this Agreement at any time, upon occurrence of any
event of default mentioned in this agreement and/or for any reasons that could lead one Party
into losses or risks – nancial or reputational - without consent of the other Party.
C. Terms of Default - A Party to this Agreement will be deemed in default of this Agreement on
the instances of any one or more of the following events:
i. Misrepresentation;
ii. Breach of covenants;
iii. Any breach of any of the conditions and obligations relating to this agreement,
iv. Material adverse change, as determined by ABC Ethiopia, in the management,
business, control of the business or nancial position of EFH ;
v. Diversion of the ABC Ethiopia credit line;

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 vi. Seizure of some or all of EFH assets by any party;
vii. Dissolution EFH ;
viii.Judicial bankruptcy or insolvency;
ix. Failure to operate for any reason included or not included in this Agreement;
x. Cancellation or removal of any legal authorizations necessary for EFH to implement
this partnership
D. Regarding all events of default, if EFH fails or is unable to remedy such default within thirty
(30) business days of receipt of written notice thereof from ABC Ethiopia, the latter shall
have the right to cancel the credit line and call on the outstanding amount.
E. Upon the effective date of the termination above, EFH must pay to ABC Ethiopia an amount
equal to: [the capital provided by ABC Ethiopia in connection with the Investment] + (plus)
[any amount at such date accrued, payable or due to ABC Ethiopia in connection with the
Investment] - (less) [any amount at such date actually paid by EFH to ABC Ethiopia in
connection with the Investment] with in 15 working days.s

XV. REPRESENTATIONS

B. Mutual representations- Each ABC Ethiopia and EFH on the date of this Agreement and on
each Investment Disbursement Date represents to the other that:
i. It is duly organized and validly existing under the laws of Ethiopia;
ii. It has the power to enter into the transaction and to execute and deliver this Agreement;
iii. Its obligations in relation to the transaction constitute legal, valid, binding and enforceable
obligations (subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable
principles of general application); and
iv. No broker, nder or other person acting pursuant to the instructions of one party is entitled to
any broker's fee or other commission in connection with the transaction for which the other
party may be responsible.
C. ABC Ethiopia representations
ABC Ethiopia represents to EFH on each Investment Disbursement Date that ABC Ethiopia:
i. Will not approve or agree to Investment prior to a Credit Reference Bureau report has been
obtained on the Borrower if the client is host
ii. Will endeavor to consistently maintain a diverse credit portfolio with regard to exposure for
Borrower demographics, location, industry, etc.
iii. Will make best estimates to invest in businesses to be nanced with ABC Ethiopia funds are
technically feasible, nancially viable, and will generate suf cient cash ow that will enable
repayment within the investment duration, based on available information at the time of the
due diligence.

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 iv. Will comply with the lending regulation, directives, circulars, and guidelines of National
Bank of Ethiopia [NBE], particularly with respect to terms governing NPL (non-performing
loan) rate.
C. EFH representations
EFH represents to ABC Ethiopia on each Investment Disbursement Date that EFH :
i. Possesses a valid operating license from the National Bank of Ethiopia (NBE).
ii. Conducts regular reporting to the National Bank of Ethiopia (NBE) in accordance with the
laws and regulations.
iii. Records a Non-Performing Loan (NPL) ratio of less than by the threshold set by the National
Bank of Ethiopia (NBE).
iv. Records 3 years externally audited nancial statements with no material ndings.

v. Records good governance principles which include “ t and proper” owners, directors and
managers; adequate Board composition and practices; competent management with adequate
managerial autonomy; adequate organization and al capacity for its speci c risk pro le.
vi. Records adequate liquidity in compliance with NBE regulations (i.e., minimum Liquidity
Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) of 100 percent), limits to
maturity gaps approved by the Board and periodically measured, and regular stress testing.
vii. Records positive pro tability on loan/investment portfolio, well diversi ed income structure,
stable earnings trend and well-managed cost structure.
viii.Has in place adequate credit policy, including internal rules for reliable appraisal of
investment/loans.
ix. Records an appropriate Implementation Capacity to verify and document agreed lending
criteria, maintain les opened for inspection during supervision reviews, and deliver regular
reporting.
x. There are no other documents executed by it which would materially and adversely affect the
Investment;
xi. No Governmental Authority approval: no notice to, registration with, consent or approval of
or any other action by any federal, state or other governmental agency or body, authority,
administrative or regulatory body, arbitrator, court or other tribunal, foreign or domestic is or
will be required for it to execute, deliver, and perform its obligations under this Agreement.

In the instance when a Party lapses on compliance to any of the items above, the Party agrees to
inform the other within 10 business days and prior to any Investment disbursement.

I. NOTICE
In the instance of the need to provide written notice to the other Party, acceptable points of contact
include:

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For ABC Ethiopia:
Claude Mazimpaka, Regional Portfolio Director
Sara Leedom, COO and Shareholder Representative
Julienne Oyler, CEO and Shareholder Representative
Fair View Building, 1st Floor, KG Ave 622, Rugando, Kimihurua, Kigali, RWANDA
Neway Alemayehu, Managing Director Ethiopia
ABC Ethiopia Of ce
Eshetu Mamo Building
Kebele 01/02 House NO. Block 5
Arada Subcity, Churchill Road
Addis Ababa, ETHIOPIA

For EFH :
Abdiaziz Hassan, CEO, Fetle Building, Wello Sefer, Addis Ababa, Ethiopia
Abdiselam Mohamed, Head of Business Development, Fetle Building, Wello Sefer, Addis Ababa,
Ethiopia
Abdulahi Mohamed, Loan Department Head, Fetle Building, Wello Sefer, Addis Ababa, Ethiopia

Notice by email is acceptable if receipt is issued by the receiving party within 24 hours of sending the
electronic mail.

II. DONOR REQUIREMENTS

In carrying out the terms of this Agreement, EFH must comply with all Donor requirements which
ABC Ethiopia may from time to time notify to EFH in writing.

III. SURVIVAL AND SEVER-ABILITY

A. Each indemnity in this Agreement is a continuing obligation, separate and independent from
the other obligations of the parties and survives termination of the transaction and it is not
necessary for a party to incur expense or make payment before enforcing a right of indemnity
conferred by this Agreement.
B. Should any provision of this Agreement, or its application to any Party or circumstance,
hereafter be determined to contravene any applicable law or public policy, or otherwise be
restricted, prohibited, or unenforceable, such provision shall as to such jurisdiction, be

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 ineffective, but only to the extent of such contravention, restriction, prohibition or
unenforceability. The remaining provision hereof shall continue and remain in full force and
effect and be construed to implement the intent of the Parties expressed herein the Agreement.

IV. FORCE MAJUERE

No delay, failure, or default will constitute a breach of this Agreement to the extent caused by acts of
war, terrorism, hurricanes, earthquakes, other acts of God or of nature, strikes or other labor disputes,
riots or other acts of civil disorder, embargoes, or other causes beyond the performing party’s
reasonable control and which were not within the reasonable contemplation of the Parties as at the
date of this Agreement.

V. GOVERNING LAW AND JURISDICTION

A. The present Agreement is governed by the laws of the Federal Republic of Ethiopia.
B. All disputes related to the performance of this agreement shall be settled amicably between
the two Parties, or referred to mediation.
C. In the event of failure of amicable or mediated settlement, the Parties will be referred to
arbitration tribunal at the Addis Ababa chamber of commerce, it this fails to resolve the
issue , the Parties will be referred to Ethiopian competent courts for the settlement of any
grievance.

VI. ADDITIONAL TERMS AND AGREEMENTS

Ancillary to the capital and Investment terms contained in this Agreement, the Parties also agree to
additional, ancillary supports as follows:

A. ABC Ethiopia shall:

i. Refer all ABC Ethiopia partners and clients to EFH to open bank accounts (Savings and/
or Demand deposits),
ii. Provide capacity building of Borrowers based on their needs and ABC Ethiopia
availability to improve repayment rates to EFH ;
iii. Provide capacity building of EFH Credit analysis and appraisal staff related to the
implementation of this Agreement, based on staff needs and ABC Ethiopia availability;
iv. Explore Fixed Time Deposits at RAYS , and will decide based on favorable rates and
conditions; and
v. Provide a non-binding annual estimate of the operating budget for ABC Ethiopia.
B. EFH shall:
i. Provide feedback to ABC Ethiopia in order to improve the performance of the access to
funds process, and achieve the overall goal of the partnership.

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 ii. EFH to provide on-going technical support and capacity building to ABC Ethiopia staff
on regulatory issues and best practices on lending in Ethiopia.

VII. ENTIRE AGREEMENT AND AMENDMENTS

A. This Agreement and the documents referred to herein contain the entire agreement between
the parties in respect of the subject matter.
B. No waivers, amendments or modi cations of any provisions of this agreement shall be
effective unless in writing, signed, stamped and approved by duly authorized representatives
of both Parties.
C. Parties are also free to develop additional Agreements between themselves for additional
services to the Borrowers in alignment with the intentions of this Agreement. This Agreement
shall stand unless otherwise noted by subsequent Agreements.

XXIX. EXECUTION OF AGREEMENT

IN WITNESS WHEREOF, this Agreement has been executed on …………… 2023.

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For and on behalf of ABC Business Consulting PLC

__________________________________________ ______________
Sara Leedom, Shareholder Representative and COO Date

__________________________________________ _____________
Julienne Oyler, Shareholder Representative and CEO Date

For and on behalf of EFH PLC

__________________________________________ _____________
Abdiaziz Hassan Muhumed, CEO Date

__________________________________________ _____________
Abdiselam Mohamed ,Head, Business Development Date.

APPENDIX 1: ABC ETHIOPIA BORROWER ELIGIBILITY AND DUE DILIGENCE

Below are the key basic eligibility criteria for a potential Borrower to qualify for the investment and
other considerations voluntarily agreed to by ABC Ethiopia.

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 A potential Borrower seeking Investment or Loan must submit to ABC Ethiopia or make
available for review:
A. All documents required by ABC to complete KYC requirements and any additional
documents required for compliance with ABC Ethiopia funders, investor, and government
partners,
B. Completed an Investment Application Form, signed by the prospective Borrower for both
refugee and host clients
C. ID of applicants / authorized Representative and shareholders in case of a company for host
client and UNHCR ID or other relevant documents if refugees
D. Credit checks/Refugee status veri cation if refugee clients
E. Bank and nancial statements for both
F. Company Registration Certi cate or business license if they are host clients
G. Tax Clearance Certi cate in case the applicant is a company and host clients

Additionally, ABC Ethiopia will assess the Borrower to con rm that the Borrower:
H. Has been operational for at least three months or it might be idea nancing

I. Is willing to work with ABC Ethiopia’s advisory team and provide all necessary information

J. ARRA and UNCHR provide a recommendation for Borrower if they are a refugee

K. Has the ability to repay the loan, based on ABC Ethiopia’s determination of cash ow and
nancial and non- nancial information
L. Has approved ABC Ethiopia business plan for their company,
M. Loan is to be used for the growth of the business, preferably to have job creation potential
(this is an added criterion for a second loan or investment),
N. Is able to provide collateral in some cases.
O. Has a good credit history with other nancial institutions, if possible.

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