Ƶ

Loan Participation Agreement for Saudi Arabia

Loan Participation Agreement Template for Saudi Arabia

A Loan Participation Agreement governed by Saudi Arabian law is a specialized financial instrument that enables multiple financial institutions to share in the risks and returns of a lending arrangement while maintaining Sharia compliance. The agreement establishes the relationship between the original lender (Grantor) and participant(s), detailing their respective rights, obligations, and profit-sharing arrangements. It must comply with both Saudi Arabian banking regulations overseen by SAMA and Islamic finance principles, incorporating specific mechanisms to ensure the arrangement is free from prohibited elements such as riba (interest).

Your data doesn't train Genie's AI

You keep IP ownership of your information

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Download a Standard Template

4.6 / 5
4.8 / 5
Access for free
OR

Alternatively: Run an advanced review of an existing
Loan Participation Agreement

Let Ƶ's market-leading legal AI identify missing terms, unusual language, compliance issues and more - in just seconds.

What is a Loan Participation Agreement?

The Loan Participation Agreement is a crucial document in Islamic banking and finance transactions in Saudi Arabia, used when a financial institution wishes to share the economic benefits and risks of a loan while maintaining Sharia compliance. It's particularly relevant for large-scale financings where risk diversification is desired, or when institutions seek to manage their exposure limits. The agreement must navigate both the requirements of the Saudi Arabian Monetary Authority (SAMA) and Islamic finance principles, making it distinct from conventional participation agreements. It typically includes detailed provisions on profit-sharing mechanisms, payment procedures, and administrative responsibilities, while ensuring all aspects align with Sharia principles. This document is essential for transactions involving multiple financial institutions in the Saudi market, whether domestic or international, and requires careful consideration of both regulatory compliance and Islamic finance structures.

What sections should be included in a Loan Participation Agreement?

1. Parties: Identification of the Grantor (original lender) and Participant(s), including their regulatory status

2. Background: Context of the underlying loan, the participation arrangement, and confirmation of Sharia compliance

3. Definitions and Interpretation: Key terms, including Islamic finance concepts, and interpretation principles

4. Participation and Risk Sharing: Core terms of the participation, including percentage, profit-loss sharing structure, and Sharia-compliant mechanisms

5. Payment Mechanics: Process for sharing payments received from the borrower, settlement procedures, and payment priorities

6. Rights and Obligations of the Grantor: Grantor's duties in loan administration, reporting, and maintaining Sharia compliance

7. Rights and Obligations of the Participant: Participant's role, funding obligations, and limitations on interference with loan administration

8. Representations and Warranties: Standard and Sharia-specific representations from both parties

9. Information Rights: Participant's rights to receive information about the underlying loan and borrower

10. Administration of the Underlying Loan: Procedures for loan management, amendments, and enforcement actions

11. Regulatory Compliance: SAMA requirements, AML obligations, and other regulatory matters

12. Termination: Events triggering termination and consequences

13. Governing Law and Jurisdiction: Saudi law application and dispute resolution procedures

What sections are optional to include in a Loan Participation Agreement?

1. Transfer and Assignment: Include when participation interests may be transferred to third parties

2. Sharia Board Approvals: Required when parties maintain their own Sharia boards and need specific approval procedures

3. Set-off Rights: Include when parties have multiple relationships requiring set-off provisions

4. Tax Provisions: Required when international participants are involved or specific tax structures apply

5. Increased Costs and Changes in Law: Include for longer-term participations where regulatory changes may impact the arrangement

6. Multiple Participants Provisions: Required when there are multiple participants requiring voting and decision-making procedures

What schedules should be included in a Loan Participation Agreement?

1. Details of the Underlying Loan: Key terms, conditions, and payment schedule of the underlying loan

2. Form of Payment Notice: Standard form for notifying participants of payments received and distributions

3. Administrative Details: Contact information, account details, and communication procedures

4. Form of Transfer Certificate: Standard documentation for transferring participation interests

5. Sharia Principles and Structure: Detailed explanation of Islamic finance structure and compliance requirements

6. Required Regulatory Notices: Ƶ for notices required by Saudi regulations

7. Calculation Procedures: Methods for calculating profit shares and other financial terms

8. Form of Confidentiality Undertaking: Standard confidentiality agreement for potential transferees

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions






































Clauses




























Relevant Industries

Banking

Islamic Finance

Financial Services

Investment Banking

Corporate Finance

Project Finance

Infrastructure Finance

Real Estate Finance

Energy Finance

Aviation Finance

Relevant Teams

Legal

Finance

Treasury

Risk Management

Islamic Banking

Corporate Banking

Credit

Compliance

Operations

Documentation

Syndications

Investment

Relevant Roles

Chief Financial Officer

Head of Islamic Banking

Sharia Compliance Officer

Legal Counsel

Finance Director

Treasury Manager

Risk Management Officer

Credit Manager

Syndications Manager

Investment Officer

Corporate Banking Manager

Regulatory Compliance Officer

Documentation Manager

Transaction Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

Find the exact document you need

Loan Agreement Letter

A Sharia-compliant Loan Agreement Letter under Saudi Arabian law that establishes the terms and conditions of a loan while adhering to Islamic finance principles and Saudi banking regulations.

find out more

Agreement To Repay Debt

A Sharia-compliant debt repayment agreement under Saudi Arabian law, documenting debt acknowledgment and repayment terms between creditor and debtor.

find out more

Loan Restructuring Agreement

A Sharia-compliant agreement under Saudi Arabian law that modifies existing loan terms to accommodate changed circumstances while ensuring compliance with Islamic finance principles and local regulations.

find out more

Term Loan Facility Agreement

Saudi Arabian law-governed term loan facility agreement compliant with Shariah principles, detailing lending terms and conditions under Islamic finance structures.

find out more

Simple Mortgage Agreement

A Shariah-compliant mortgage agreement under Saudi Arabian law establishing security interest over real property with associated financing terms and conditions.

find out more

Loan Agreement Between Companies

A Sharia-compliant corporate loan agreement for use between companies in Saudi Arabia, incorporating local legal requirements and Islamic finance principles.

find out more

Loan Repayment Contract

A Sharia-compliant loan repayment agreement under Saudi Arabian law that structures the terms and conditions for loan repayment while ensuring compliance with Islamic financial principles.

find out more

House Loan Contract

A Sharia-compliant house loan contract under Saudi Arabian law, establishing terms for home financing while adhering to Islamic banking principles and local regulations.

find out more

Flexi Finance Loan Agreement

Shariah-compliant flexible financing agreement template for Saudi Arabian jurisdiction, incorporating Islamic banking principles and local regulatory requirements.

find out more

Debt Agreement Contract

A Shariah-compliant debt agreement under Saudi Arabian law establishing terms and conditions for lending arrangements between parties.

find out more

Contract For Land Purchase

A Saudi Arabian law-compliant contract for the purchase and sale of land property, incorporating all necessary terms and conditions under local regulations and Sharia principles.

find out more

Deed Of Assumption Of Mortgage Car

A Saudi Arabian legal document facilitating the transfer of vehicle mortgage obligations between parties while ensuring Sharia compliance.

find out more

Loan Novation Agreement

A Saudi Arabian law-governed agreement that transfers loan obligations between parties while ensuring Shariah compliance.

find out more

Individual To Individual Loan Agreement

A Sharia-compliant individual-to-individual loan agreement template governed by Saudi Arabian law, facilitating private lending arrangements while ensuring compliance with Islamic financial principles.

find out more

Loan Participation Agreement

A Saudi Arabian law-governed agreement establishing rights and obligations in a Sharia-compliant loan participation arrangement between financial institutions.

find out more

Loan Agreement Term Sheet

A Saudi Arabian law-governed term sheet outlining key terms for Shariah-compliant financing arrangements, serving as the basis for detailed facility documentation.

find out more

No Loan Agreement

A Sharia-compliant financial agreement under Saudi Arabian law that structures monetary arrangements without traditional lending elements.

find out more

Mortgage Loan Contract

A Shariah-compliant mortgage loan agreement under Saudi Arabian law, establishing financing terms and property security arrangements in compliance with SAMA regulations.

find out more

Securities Lending Agreement

A Saudi Arabian law-governed agreement establishing terms for securities lending transactions, incorporating CMA regulations and Shariah compliance requirements.

find out more

Money Repayment Agreement

A Sharia-compliant agreement under Saudi Arabian law establishing terms for monetary debt repayment between parties.

find out more

Loan Surety Agreement

A Sharia-compliant guarantee agreement under Saudi Arabian law where a guarantor commits to fulfilling a borrower's obligations to a lender in case of default.

find out more

Loan Reinstatement Agreement

A Sharia-compliant agreement under Saudi Arabian law that reinstates a defaulted loan, establishing new payment terms and conditions between lender and borrower.

find out more

Lending Contract

A Sharia-compliant lending agreement under Saudi Arabian law, establishing terms for financial transactions in accordance with Islamic finance principles and local regulations.

find out more

Lending Agreement

A Sharia-compliant financing agreement under Saudi Arabian law that establishes terms and conditions for lending between parties.

find out more

Lenders Agreement

A Saudi Arabian law-governed financing agreement establishing Shariah-compliant lending terms and conditions between financial institutions and borrowers.

find out more

Lender And Borrower Agreement

A Sharia-compliant financing agreement under Saudi Arabian law establishing terms and conditions between lender and borrower, including profit rates, security, and payment terms.

find out more

Home Loan Agreement

A Sharia-compliant home financing agreement under Saudi Arabian law, detailing terms, conditions, and security arrangements for property purchase financing.

find out more

Finance Agreement

A Sharia-compliant financing agreement under Saudi Arabian law establishing terms for Islamic financing arrangements and regulatory compliance.

find out more

Forbearance Agreement Commercial Loan

A Shariah-compliant agreement under Saudi Arabian law that temporarily suspends a lender's enforcement rights against a defaulting commercial borrower while establishing new compliance terms.

find out more

Education Loan Agreement

A Sharia-compliant Education Loan Agreement under Saudi Arabian law, establishing terms for educational financing between a financial institution and student borrower.

find out more

Debt Agreement Letter

A Sharia-compliant Debt Agreement Letter under Saudi Arabian law that documents debt obligations and repayment terms between parties.

find out more

Credit Agreement Contract

A Shariah-compliant credit agreement under Saudi Arabian law establishing terms for credit facilities between lender and borrower.

find out more

Contract Of Loan With Real Estate Mortgage

A Sharia-compliant loan agreement secured by real estate mortgage under Saudi Arabian law, combining financing terms with property security arrangements.

find out more

Assumption Of Mortgage Form

A Saudi Arabian legal document that transfers mortgage obligations from an existing borrower to a new party, compliant with local laws and Sharia principles.

find out more

Mortgage Note Purchase Agreement

A Sharia-compliant agreement for the purchase and sale of mortgage notes in Saudi Arabia, conforming to Saudi banking regulations and Islamic finance principles.

find out more

Personal Loan Agreement With Notary

A notarized personal loan agreement under Saudi Arabian law, establishing Sharia-compliant terms between a lender and borrower with official authentication.

find out more

Loan Against Rent Agreement

A Saudi Arabian Shariah-compliant agreement facilitating property owner financing secured against rental income streams.

find out more

Credit Agreement Between Two Parties

A Shariah-compliant credit agreement under Saudi Arabian law establishing terms for credit extension between two parties.

find out more

Installment Loan Contract

A Sharia-compliant installment loan agreement under Saudi Arabian law, establishing terms for financing and repayment in accordance with Islamic principles and Saudi banking regulations.

find out more

Agreement For Mortgage Of Property

A Sharia-compliant property mortgage agreement under Saudi Arabian law, establishing security interest over real property while adhering to Islamic finance principles and local regulations.

find out more
See more related templates

ұԾ’s Security Promise

Genie is the safest place to draft. Here’s how we prioritise your privacy and security.

Your documents are private:

We do not train on your data; ұԾ’s AI improves independently

All data stored on Genie is private to your organisation

Your documents are protected:

Your documents are protected by ultra-secure 256-bit encryption

We are ISO27001 certified, so your data is secure

Organizational security:

You retain IP ownership of your documents and their information

You have full control over your data and who gets to see it