Solfin Sustainable Finance Private Limited

Loan Policy

1. Introduction and Objective

The purpose of granting loans is to earn income from interest earnings and / or avail benefit of capital appreciation or both, on case to case basis.

In terms of Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025 dated 28th November 2025 and various other directions / circulars issued by the Reserve Bank of India ("RBI") from time to time, Non-Banking Financial Companies ("NBFCs") are expected to exercise due diligence and care in all its lending decisions.

In accordance with the above, the Board of Directors of Solfin Sustainable Finance Private Limited (Formerly Known as Dhanvikas Fiscal Services Private Limited) (hereinafter referred to as "the Company" or "SSFPL") framed broad guidelines which shall be considered while taking decisions for granting loan as well as to inculcate the operational efficiency.

The objective of the Company is to make loans to get reasonably good returns on the basis of sound lending decisions.

The objectives of this Policy are as below:

a)To articulate a set of standardized principles, evaluation criteria and procedures for the lending activities of SSFPL.
b)To institute due diligence for mitigating level of credit risks and improve credit quality.
c)To define overall credit risk appetite.
d)To establish underwriting framework – including maximum credit limits, risk limits, etc.
e)To ensure thorough loan appraisal, validity of purpose, documentation requirements, disbursement arrangements, follow-up and monitoring and closure of loan accounts. This includes both, supervision of outstanding loans as well as recovery of overdue loans.

This Loan policy provides an overall description of all stages of the lending process.

2. Regulations

During the course of its operations, the Company shall strictly adhere to various guidelines as may be stipulated from time to time, by the RBI. These guidelines will include:

a)Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025 ("Master Directions");
b)Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025;
c)Reserve Bank of India (Non-Banking Financial Companies – Credit Risk Management) Directions, 2025;
d)Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025;
e)Reserve Bank of India (Non-Banking Financial Companies – Know Your Customer) Directions, 2025;
f)Reserve Bank of India (Non-Banking Financial Companies – Transfer and Distribution of Credit Risk) Directions, 2025;
g)Reserve Bank of India (Non-Banking Financial Companies – Securitisation Transactions) Directions, 2025;
h)Reserve Bank of India (Non-Banking Financial Companies – Credit Information Reporting) Directions, 2025;
i)Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Directions, 2025;
j)Adherence to Anti Money Laundering Standards ("AML") – Prevention of Money Laundering Act, 2002 as amended, read with the relevant rules and obligations of NBFCs;
k)Guidelines on Fair Practices Code for NBFCs;
l)Applicable Circulars, Guidelines and Clarifications as may be issued from time to time by RBI.

Pursuant to any subsequent amendments or any statutory modifications or re-enactments in the above stated guidelines / norms / clarifications or in any other applicable Acts / Regulations, if there is any change in any of the parameter(s) framed by the Board, then the Act / Regulation will have overriding effect on the parameter(s).

3. Regulatory Restrictions on Loans and Advances

I. Loans and Advances to Directors

Unless sanctioned by the Board of Directors/ Committee of Directors, the Company shall not grant any loans and advances aggregating INR 5 Lacs (Indian Rupees Five Lakh) and above to:

a)Its Directors (including the Chairman/ Managing Director, if any) or relatives of the directors;
b)Any firm in which any of the Directors of the Company or their relatives are interested as a partner, manager, employee or guarantor; and
c)Any company in which any of the Directors of the Company, or their relatives are interested as a major shareholder, director, manager, employee or guarantor.

Provided that Director or his/her relatives shall be deemed to be interested in a Company, being the subsidiary or holding company, if they are major shareholder or in control of the respective holding or subsidiary company.

Provided that the Director who is directly or indirectly concerned or interested in any proposal should disclose the nature of their interest to the Board of Directors/the Committee when any such proposal is discussed. They should recuse themselves from the meeting unless their presence is required by the other directors for the purpose of eliciting information and the Director so required to be present shall not vote on any such proposal.

The proposals for credit facilities of an amount less than INR 5 Lakh (Indian Rupees Five Lakh) to the borrowers may be sanctioned by the Sanctioning Authority in the Company under powers vested in such authority, subject to the matter being reported to the Board of Directors of the Company.

II. Loans and Advances to Senior Officers and Employees of the Company

The Company shall abide by the following when granting loans and advances to their Senior Officers and Employees. Loans and advances to the Senior Officers and Employees of the Company shall be approved by the Board of Directors of the Company.

III. In Respect of Grant of Aforementioned Loans Mentioned at Para I and II Above

a)The Company shall obtain a declaration from the borrower giving details of the relationship of the borrower with the directors/ senior officers of the Company for loans and advances aggregating INR 5 Lakh (Indian Rupees Five Lakh) and above. The Company shall recall the loan if it comes to their knowledge that the borrower has given a false declaration.
b)These guidelines shall be duly brought to the notice of all directors and placed before the SSFPL's Board of Directors.
c)The Company shall disclose in its Annual Financial Statement, aggregate amount of such sanctioned loans and advances as per the prescribed template.

The above norms as mentioned at para I, II and III will equally apply to awarding of contracts.

IV. Loans and Advances to Real Estate Sector and Loan against Gold

The company shall not be advancing loans to the Real Estate Sector and Loan against Gold.

V. Sensitive Sector Exposures

Exposure to the capital market and real estate (direct and indirect) will be reckoned as sensitive exposure. Accordingly, SSFPL shall fix board-approved internal limits for sensitive exposures for capital market and real estate exposures. Dynamic vulnerability assessments of various sectors and their likely impact on business, as evaluated periodically for fixing such internal exposure limits. SSFPL shall also comply with the RBI Directions while lending against the collateral of listed shares.

VI. Loans against SSFPL's Own Shares and Debentures

SSFPL shall not lend against its own shares. SSFPL shall not extend loans against the security of its own debentures (issued either by way of private placement or public issue).

4. Terms & Conditions Governing the Granting of Loans

The purpose of the Company to grant loans is to earn income from interest earnings or avail benefit of capital appreciation or both, on case to case basis.

a) Borrower

The Company may give loan to any Body Corporate(s), Firm(s), Individuals, etc., subject to the regulatory prescriptions and / or restrictions on the specific sector or category of borrowers, as may be stipulated by RBI from time to time.

b) Legal Entity Identifier (LEI) for Borrower

Non-individual borrowers enjoying aggregate exposure of ₹5 crore and above from banks and financial institutions (FIs) shall be required to obtain LEI codes as per the timeline given below:

Total Exposure	LEI to be Obtained on or Before
Above ₹25 crore	April 30, 2023
Above ₹10 crore and up to ₹25 crore	April 30, 2024
₹5 crore and above and up to ₹10 crore	April 30, 2025

c) Credit Analysis of the Borrower

The Company shall sanction the loan after reviewing the financial strength of the borrower and taking into account any regulatory advices. The repayment capacity of the borrower will be assessed based on its past performance as well as its future plans and projections. The Company shall use data from Credit Information Reports of CIC's while approving loans.

d) Sanctioning Authority

Loans shall be approved as per the Product Note of the company as approved by the Board, from time to time.

In case of a new Product and the Product Note has not yet been presented and approved by the Board, then the following approvals shall be obtained for granting loans under the said new Product:

S.No.	Loan Limit (Per Loan with a cumulative limit of INR 3 Crores)	Approving Authority
1	Upto INR 10 Lakh	SVP – Credit
2	More than INR 10 Lakh and upto INR 25 Lakh	1 Founder Director
3	More than INR 25 Lakh and Upto INR 1 Crore	2 Founder Directors

f) Term

The Company shall make short-term loans and long term loans including inter corporate deposits for a period not exceeding 10 years.

g) Request from the Borrower

The borrower desirous of availing loan shall make a request in writing to the Company. The Company may at its sole discretion either accept or reject the request. Wherever felt necessary, the Company may enter into an agreement to grant loan on such terms and conditions as are within the ambit of this policy.

h) Pricing

i.The company may offer fixed rate loans or floating rate loans.
ii.The company may also charge different fees like processing fees, foreclosure fees, pre-payment fees, switch charges and such other charges/fees as it deems appropriate at the time of sanctioning of loans.
iii.The company shall on a case-to-case basis recover direct expenses on Loan origination and maintenance.
iv.The company can levy a penal charge for non-levy of material terms and condition of the loans and for non-payment of dues. Such penal charges shall not be capitalised.
v.The penal charges in case of loans sanctioned to 'individual borrowers, for purposes other than business', shall not be higher than the penal charges applicable to non-individual borrowers for similar non-compliance of material terms and conditions.
vi.The quantum of penal charges shall be reasonable and commensurate with the non-compliance of material terms and conditions of loan contract without being discriminatory within a particular loan / product category.
vii.At the time of sanction, NBFCs shall clearly communicate to the borrowers about the possible impact of change in benchmark interest rate on the loan leading to changes in EMI and/or tenor or both. Subsequently, any increase in the EMI/ tenor or both on account of the above shall be communicated to the borrower immediately through appropriate channels.

i) Interest

The rate of interest on loans, where applicable, shall be upto 36% p.a. depending on the market conditions, availability of surplus funds with the Company. The Interest Rate is calculated based on the following factors:

Interest Rate Factors

1.Weighted Average cost of borrowing
2.Cost of Equity
3.Fund raising cost
4.Negative Carry on Investment
5.ALM mismatch cost
6.Opex Cost
7.Risk Premium
8.Margin/Spread

Spread Calculation Factors

1.Interest rate risk (fixed vs floating loan)
2.Credit and default risk in the related business segment
3.Historical performance of similar homogeneous clients
4.Profile of the borrower
5.Industry segment
6.Repayment track record of the borrower
7.Nature and value of collateral security
8.Secured vs Unsecured loan
9.Subvention available
10.Ticket size of loan
11.Bureau Score
12.Tenure of Loan
13.Location delinquency and collection performance
14.Customer Indebtedness (other existing loans)

The rate of interest for the same product and tenor availed during same period by different customers need not to be standardized. It could vary for different customers depending upon consideration of any or combination of above factors.

The Interest on the loan amount shall accrue and will become due and payable on monthly or quarterly basis depending upon case to case.

The Sanctioning Authority shall record specific reasons in writing at the time of sanctioning loans. Moratorium shall not be granted for a period exceeding three months at the time of disbursement. No moratorium for principal or interest is granted subsequently.

j) Pre and Post Disbursement Monitoring of the Loans

The Company shall procure from the Borrowers, other than group companies, end use certificates duly certified by Chartered Accountants, wherever prescribed in the terms of the sanction letter.

k) Repayment

The Loan may be repayable in one or more instalments as per the terms agreed upon. However, the cut off date for repayment may be extended by the Sanctioning Authority/Credit Committee for any particular case.

l) Cooling Off Period

A borrower shall be given an explicit option to exit loan by paying the principal and the proportionate APR without any penalty during this period. The period would be three days from disbursal.

m) Security

For secured loans, the borrower shall, in consideration of the loan given, create such security in favour of the Company as stipulated by the Company, including a demand promissory note, wherever applicable.

n) Collaterals

In case it is felt necessary to strengthen the credit worthiness of the borrower, a co-borrower / guarantor may be considered.

o) Default

In the event of any default made by the borrower, the Company may charge Penal Charges for non-compliance of material terms and conditions of the loan agreement by the borrower, however, there shall be no capitalisation of such Penal Charges.

p) Waiver

In case it is felt necessary to strengthen the relation with the Borrower and upon review of the performance of the loans, a waiver of upto INR 10 Lakhs may be given to the Borrower on case to case basis by the executive director of the Company.

q) Review of Performance

The Sanctioning Authority/ Board shall periodically review the performance of loans.

r) Change in Interest Rate and Charges

Any change in terms of the loan including change in the interest rate or charges shall be done only prospectively after giving the borrower appropriate notice.

s) Policy on Demand Loans

Demand/Call loans offer flexibility to both customer and lender in handling the credit requirements. Within the framework of its loan policy, SSFPL may grant short term demand loans for short term working capital or liquidity management purposes to corporates and MSMEs. These loans are repayable on demand or at short notices. The amount of loan and repayment tenor will be negotiated and agreed up front and communicated in writing to the borrower.

i.Dealer Financing as per Product approved by the Board shall be deemed as Board approval for all facets of the Product and Loans thereof.
ii.All demand loans will be sanctioned by the Board or as delegated by the Board. All Demand loans under delegated powers shall be reported to the Board at the next meeting. Specific justification for the sanction shall be recorded in each case.
iii.All demand loans will be sanctioned with a repayment period of not more than one year. A demand loan may be called up or demanded by SSFPL at its discretion at any time after sanction up to a period of one year. Demand loans may be renewed on maturity subject to satisfactory conduct and servicing.
iv.Subject to the interest rate policy of SSFPL, interest on demand loans shall be payable at monthly or quarterly rests. Pre-payment penalty shall not be levied on Demand Loans.
v.Demand or Call loans will be sanctioned on a fully secured basis.
vi.Sanctioned credit limits will be need based and asset backed and subject to limits under the Company's credit exposure norms.
vii.The performance of demand loans will be reviewed every six months. Demand or call loans shall not be renewed unless the periodical review has shown satisfactory compliance with the terms of sanction.
viii.The rate of Interest shall be from minimum 10% p.a. to 36% p.a. depending on risk profile, tenure and other factors.

t) Disbursal of Loan Amount in Cash

SSFPL shall not disburse any loan in cash.

u) Rounding Off of Transactions to the Nearest Rupee

All transactions of SSFPL, including payment of interest on deposits/ charging of interest on advances, shall be rounded off to the nearest rupee, i.e., fractions of 50 paise and above shall be rounded off to the next higher rupee and fractions of less than 50 paise shall be ignored. It shall be ensured that cheques/drafts issued by clients containing fractions of a rupee shall not be rejected by them.

v) Reporting Requirements

The Company shall adhere to the prescribed prudential norms and reporting requirements in the periodical returns, CERSAI, platform and in the annual financial statements.

Last updated: 6 October 2026