The Central Bank of Nigeria (CBN) has disclosed the guidelines that must be followed by individuals and companies to access the N50billion ($139 million) targeted credit facility for households and Small and Medium Enterprises that are badly hit by COVID-19.
This was disclosed in a circular issued by CBN and signed by its Director, Financial Policy and Regulation, Kevin Amugo.
Here Is All You Need To Know
- According to the CBN, those that can benefit from the fund are households with verifiable evidence of livelihood adversely impacted by COVID-19; existing enterprises with verifiable evidence of business activities adversely affected as a result of the pandemic and enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 pandemic.
- CBN guideline states that activities covered under the scheme include agricultural value chain activities; hospitality (accommodation and food services); health (pharmaceuticals and medical supplies); and airline service providers.
- Others are manufacturing/value addition; trading and any other income-generating activities as may be prescribed by the CBN.
The scheme would be financed from the Micro, Small and Medium Enterprises Development Fund and the eligible participating financial institution for the Scheme would be NIRSAL Microfinance Bank, the circular reads in part.
- The apex bank added that the loan amount would be determined based on the activity, cashflow and industry size of beneficiary, subject to a maximum of N25m for SMEs.
- It said households can access a maximum of N3million while working capital would be a maximum of 25 per cent of the average of the previous three years’ annual turnover
The apex bank had last week unveiled the fund in response to the coronavirus pandemic, which had led to unprecedented disruptions to global supply chains, sharp drop in global crude oil prices, turmoil in global stock and financial markets, lockdown of large swaths movements of persons in many countries, among others.
In this respect, the CBN introduced the N50billion Targeted Credit Facility as a stimulus package to support households and Micro, Small and Medium Enterprises affected by the COVID-19 pandemic.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com