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ADMINISTRATION AND PAYMENT: a service by which money is managed with a specific destination and commitment is made to pay all suppliers and contractors.

ADMINISTRATION OF RESOURCES BY AGREEMENT: it is a service through which our clients enter into a mandate or trustee agreement with the Institute for the administration of financial resources of specific projects. There are three modalities: Resource administration for special projects; administration, payment and collection; administration and payment.

ADMINISTRATION OF RESOURCES FOR SPECIAL PROJECTS: service by which the management of income and expenses is realized during the execution of the clients' projects, in addition to technical supervision and backing for the project execution.

ALLOCATION: it is a process by which Colombia's central bank obtains money against the handing over of documents that represent its debentures.

ANNEX OF PAYMENT (PAYMENT TAG): support document that shows the way in which the payment was realized by the borrower.

ANNUAL AVERAGE DEPOSITS: calculation obtained by averaging the last twelve monthly deposits.

ASSIGNMENT: it is a kind of guarantee represented by goods and returns in public credit operations.

ASOINFIS: entity that groups together the promotion and development financial institutes of Colombia.

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B

BANK AUTHORIZATION: document undersigned by the legal representative of the entity or client, its respective treasurer and the bank manager where the debtor has an account, whereby an automatic debit to the account is authorized for the amount reported by IDEA as credit installment.

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C

CIFIN (National Financial Information Center): it is an office of the Banking Association (Asobancaria) and the financial entities of Colombia that provides a service of interest to the banks. Its objective is to supply information structured for the entities using their services in a timely, reliable manner and according to the needs determined jointly with said users.

COLLECTION NOTICE: document that is issued with the credit data and registering the amount to be paid by the client to IDEA on a previously assigned date.

COMPANY DEVELOPMENT CREDIT: these are resources granted to the small businesses, micro-businesses, family businesses, pre-association groups, women heads of households, through an intermediary and having a term of less and/or more than one year, leveraged by specific resources from the territorial entities, own resources or through rediscounting quotas authorized by the banking system.

CREDIT: obtaining resources in the present without realizing an immediate payment, under the promise of paying back in the future according to previously established conditions. The bank credit (in strict terms, when a current accounts has credit authorization) is a contract by which the Financial Entity puts under disposition of the client a certain quantity of money which must be returned with interests and added commissions according to the terms agreed upon.

CREDITS BASED ON DISCOUNTING ACTS AND INVOICES: short term credit service which has as an objective resolving liquidity situations between the contractors and the public entities.

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D

DEBT PROJECTION: it is the projection made for the credit taker in order for him to have a notion of the future installments and by how much these will increase.

DEBT SERVICE: it is the quantity of interests and capital amortization on pending debts that are to be paid for a specific time period. It is generally done annually.

DECENTRALIZED ENTITY: according to Law 489 of 1998, the decentralized entities in Colombia are defined as those that comply with four main characteristics: having a legal identity, administrative autonomy, own patrimony and are subject to political control and to all the guidelines given by the organisms of the administrative offices in which they are inscribed, which in general is a Municipality or Department.

DISCOUNTING OF ACTS AND INVOICES: these are short term operations by which resources are provided to clients' contractors, by means of endorsing the acts of executed works or invoices of services rendered. Said operation is realized up to a specific percentage of the act's or invoice's net value.

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E

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F

FISCAL TERM: it is the period from January 1 to December 31st of each year.

FIXED RETURN ON INVESTMENT: The fixed return on investment occurs when the returns on investments are known beforehand (or at least in an acceptably predictable level), in other words, what return flows will be generated. They do not need to be constant or regular. These investments are generally long-term.

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G

GUARANTEE: what is granted to ensure compliance with a credit debenture.

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H

HOLDING COMPANYIt is a company that controls the activities of other ones by owning all or a significant part of those other companies' stock.

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I

INVESTMENT PORTFOLIO: it is a group of financial assets in which investment is made.

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L

LEVERAGE: percentage between own capital and credit invested in a financial operation.

LIQUIDITY SURPLUSES: those resources that are not immediately destined to the development of the activities object of the entities.

LOANfinancial operation that the State or public entities realize, normally by way of credit title issuances to take care of their needs or obligations. These apply particularly to loans granted to the State.

LONG-TERM PUBLIC DEBT: those obligations acquired by the public sector during a fiscal term and whose due dates are in future periods or terms.

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M

MODALIDAD DE PAGO: periodicidad con la que se abona una determinada cantidad de dinero por el préstamo recibido.

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O

OUTSTANDING LOANS: loans being paid on time or with past due date equal or less than 30 days.

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P

PAYMENT CAPACITY: minimum flow of operational savings that permits realizing every year's debt service timely, leaving an amount for financing investments.

PAYMENT MODALITY: periodicity with which a specific amount of money is paid for loan pay- back.

PAYMENT SOURCE: those resources which are offered and available to cover an acquired obligation.

PUBLIC CREDIT OPERATIONS: According to Law 358 of 1997, the acts or contracts that have as their object to supply resources to the territorial entities or those similar acts or contracts are eligible for public credit operations that give them time to pay back the loan. These acts or contracts supply goods or services that give more than a year to be paid. Also included are those acts or contracts by which the territorial entities act as solidary debtors or guarantors of payment obligations, and those related to public debt management operations.

PUBLIC DEBT: It is any obligation acquired by a public organism. It consists in taking into account in the budget the payment of capital amortization and interests.  

PUBLIC DEBT MANAGEMENT OPERATIONS: those operations that pertain to the public debt management area, oriented to improving the debt profile of the official entity that requires it. If this operation does not require a new debt, its credit limit will not be affected.      

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R

RESOURCE RAISING:    It is a process by which a financial intermediary receives resources from individuals in exchange for the acquisition of debts and debentures.

RECIPROCITY: it is a practice utilized in commercial relations which consists of maintaining a good yearly average of deposits in order to have access to the credits granted by the entity. It is the relation between the yearly deposit average and the yearly debt average.

REDISCOUNTABLE CREDITS WITH THE NATIONAL FINANCIAL FUNDSIt is a multi-sector credit line by which we get resources from National Financial Funds for our clients in order to promote programs and works tending to improve the community's quality of life. Currently, we realize operations with the following funds: FINDETER, BANCOLDEX and FINAGRO.

REDISCOUNTING OPERATIONS:  It is a credit operation modality whereby Findeter supplies credit resources to financial intermediaries, as IDEA is in this case. IDEA, in turn, gives them to the beneficiary companies.

REFINANCING: it is granting new financial conditions to a due debt to facilitate payment. 

REPROGRAMMING: it is an agreement between debtors and creditors to extend the term for paying back a loan, after the debtor has declared itself insolvent. For the private and most of the public creditors, the agreement invariably implies delays on the payment of the debt capital, but only in rare cases a delay in interest payments.

RESTRUCTURING: it is granting new financial conditions to the debt balance to facilitate payment.

RISK CLASSIFICATION: risk classification is the opinion of a credit rating company concerning the credit quality of a company. The credit risk evaluation is based on the analysis of the interrelation of elements such as: the macroeconomic environment, the sector where it exercises it activities, competitive position at the national and international level, plan and strategies, management quality, technological innovations, market opportunities and control and auditing policies. The following aspects are also evaluated: accounting, financial and marketing aspects, projections, income and expenses flaws, productivity, suppliers, and clients, among others.

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S

SHORT TERM CREDITSthese are short term loans that the state entities enter into with a payment term of one year or less. The short term credits can be transitory or given by the treasury department. (Decree 2681/83, Art. 15).

SHORT-TERM PUBLIC DEBTthose obligations acquired by the public sector during a fiscal year and whose due dates are in the same period or term.

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T

TEMPORARY CREDITS: these are resources granted to the territorial entities and their decentralized subsidiaries for a short term and having a temporary character. These will then be paid with credits of more than one year term, whereby there must be a serious business proposal.

TERM DEPOSITS: it is a certificate of deposit with a term greater or equal to 30 days, with automatic renewal. Likewise, for term deposits, the institute can agree in advance on interest rates.

TERMSperiod of time given to pay a credit.

TREASURY CREDITthese are resources granted to territorial entities and decentralized subsidiaries which are to be destined exclusively to attend insufficient petty box of a temporary character during the fiscal term.

TREASURY DOCUMENTS: They are public debt documents issued by the Nation's General Treasury (in pesos, in units of real value or in pesos linked to the national exchange rate to the dollar) . It is one of the greatest sources of financing for the government.

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U

VARIABLE RETURN ON INVESTMENT: The variable return on investment occurs when the returns on investments are not known beforehand (which could even be negative) because these depend on diverse factors such as the company's performance, the market's behavior, the economy's evolution, etc. Some examples are stocks, investment funds participation and convertible bonds and obligations.   

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