In fulfillment of a pledge to expand and increase its stimulus package for the COVID-19 pandemic, the Central Bank of Nigeria (CBN) is receiving applications for its N50 billion targeted credit facility (TCF) aimed at supporting households and micro, small and medium enterprises (MSMEs) affected by the COVID-19 pandemic.
The stimulus package of N50 billion TCF in 2020, which according to findings eventually stretched to N100 billion set up by the apex bank in March 2020, is disbursed through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance Bank.
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 percent of its 2019 GDP; the UK, 45.04 percent; the USA, 28.4 percent; Brazil, 27.6 percent; South Africa, 12.6 percent; China, 11.5 percent; India, 10.0 percent; and Russia 7.1 percent compared with Nigeria’s paltry 4.0 percent.
“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.
Announcing the portal reopening in a tweet on Monday, NIRSAL Microfinance Bank (NMFB) said applicants must be households and MSMEs with verifiable evidence of livelihood adversely impacted by the coronavirus pandemic.
Enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 pandemic are also eligible to apply.
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 percent 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.