In its bid to cushion the effect of the Covid-19 outbreak on Nigerians, most especially on households, small and medium sized enterprises, the Central Bank of Nigeria (CBN) issued guidelines for the implementation of N50 Billion targeted credit facility. it is a stimulus package to support MSMEs (Micro, Small and Medium Enterprises) affected by this pandemic.  

Eligible Participants 

• Households with verifiable evidence of livelihood adversely impacted by COVID-19; and 
• Existing enterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic. 
• Enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 pandemic. 

Eligible activities under the Scheme include: 

1. Agricultural value chain activities 

1. Hospitality (accommodation and food services) 

1. Health (pharmaceuticals and medical supplies) 

1. Airline service providers 

1. Manufacturing/value addition 

1. Trading 

1. Any other income generating activities as may be prescribed by the CBN. 

The eligible participating financial institution for the Scheme is NIRSAL Microfinance Bank (NMFB). NIRSAL means Nigeria Incentive-Based Risk Sharing System for Agricultural Lending. NIRSAL’s mandate is to stimulate the flow of affordable finance and investments into the agricultural sector. The Bank is Owned 50% by the Bankers Committee, 40% by NIRSAL and 10% NIPOST. Some of its strategic objectives include improvement and growth of the economy, drive financial inclusion, easy access to credit and other financial services for SMEs, etc.  

Loan Limit 

• Households:  a maximum of N3Million 
• SMEs: The loan amount shall be determined based on the activity, cashflow and industry/segment size of beneficiary, subject to a maximum of N25Million 

Interest rate and Collateral requirements 

The interest rate is equally attractive, 5% p.a. (all inclusive) up to 28th February 2021 and thereafter, the interest on the facility shall revert to 9% p.a. (all inclusive) as from 1st March 2021. The Term of the loan shall have a maximum tenor of not more than 3 years with, at least, one-year moratorium (a legally authorized period of delay in the performance of a legal obligation or the payment of a debt). 

There is also a list of collateral requirements which include (Moveable asset(s) duly registered on the National Collateral Registry (NCR), Simple deposit of title documents, in perfectible state, Two (2) acceptable Guarantor, Comprehensive Insurance over the asset, etc.). Repayments are to be made on installment basis by the beneficiaries of the scheme to the NMFB according to the nature of enterprise and the repayment schedule/work plan provided at the application stage. 

Modalities 

Eligible households or MSMEs shall submit applications directly to NIRSAL Microfinance Bank (NMFB). Upon satisfactory appraisal of application, NMFB shall forward the applications to the CBN for final approval. CBN will review the applications and then give final approval for disbursement to NMFB. Same applies to corporate entities. 

The exit date of this Intervention is 31st December 2024. By then, the beneficiaries are expected to have repaid the loan. 

Please note that this framework is subject to review from time to time as may be deemed necessary by the CBN. 

For more on this, send an email to toluwase@tonbofa.com