CBN reopens portal for N50bn target facility

In fulfilment of a pledge to expand and increase its stimulus package for the COVID-19 pandemic, the Central Bank of Nigeria (CBN) has added N50 billion to the Targeted Credit Facility (TCF) meant for households and small businesses.

The Bank had through the NIRSAL Microfinance Bank announced a N50 billion TCF in 2020, which according to findings eventually stretched to N100 billion.

In 2020, CBN announced a total package of N1.3 trillion in various packages to cushion the effect of the pandemic with the Federal Government announcing an additional N1 trillion.

However, at its Monetary Policy Committee (MPC) meeting in January, CBN management noted the large stimulus packages deployed by many countries to fast-track growth recovery and restore livelihoods across the world.

“For instance, Japan provided stimulus package valued at 66.9 per cent of its 2019 GDP; UK, 45.04 per cent; USA, 28.4 per cent; Brazil, 27.6 per cent; South Africa, 12.6 per cent; China, 11.5 per cent; India, 10.0 per cent; and Russia 7.1 per cent compared with Nigeria’s paltry 4.0 per cent.

“The MPC, therefore, urged the Bank to further expand its current stimulus packages to support the fiscal interventions to reflate and boost recovery in the economy,” a communique of the meeting disclosed.

In a tweet on Thursday, NIRSAL Microfinance Bank invited households with verifiable evidence of livelihood adversely impacted by COVID-19; existing microenterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic; and SMEs Enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 pandemic to apply for up to N25 million loan.

The interest rate on the facility will be nine per cent per annum, working capital will be for a maximum period of one year, with no option for rollover.

The working capital to be offered to eligible businesses has been fixed at a maximum of 25 per cent of the average of the previous three years’ annual turnover.

However, if the enterprise is not up to three years in operation, 25 per cent of the previous year’s turnover will be offered.

Term loans have a maximum tenor of not more than 3 years with, at least, one-year moratorium.

Households can access a maximum loan of N3 million while the loan amount to SMEs shall be determined based on the cash flow and industry/segment size of the beneficiary, subject to a maximum of N25 million.

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CBN reopens portal for N50bn target facility