The Central Bank of Nigeria (CBN) has announced its plans to disburse N220 billion as loans to cooperative organisations under the Micro Small and Medium Enterprises Development Fund (MSMEDF). This was made known by CBN’s Director of Corporate Communications, Isaac Okorafor.
Okorafor said the loan is without collateral and the interest rate is only 9 percent. The N220 billion credit facility, according to Okorafor, is to encourage artisans, including people who are into vulcanising works, hairdressing and barbing among others, especially those who employers of labour.
“If you empower this group of people, the economy will move faster because they will also employ others,” Okorafor said.
Why CBN is making the credit facility available to artisans
Business operators in Nigeria are often discouraged to apply for loan because they would not be able to access such in commercial banks, where they need to have a collateral.
In view of the mentioned challenge, the CBN made provision for the credit facility for them to access through their cooperative organisations.
The apex bank, had in August, through its Anchor Borrowers’ Programme (ABP), approved a credit facility of N14.9 billion to the Northeast Commodity Association (NECAS). 27,000 farmers are to benefit from the scheme while 75,000 hectares of land would be cultivated in the four participating states.
The credit facility was programmed to cover all the commodities that the Northeast region of the country have the comparative advantage of producing which include rice, maize, millet, sorghum and even small ruminants amongst others.
The inputs would be given to farmers in form of loans that are expected to be paid back in installments.
What the CBN Anchor Borrower’s Scheme is all about
The Anchor Borrower Scheme is an initiative of the CBN launched in 2017, with the aim of creating a link between anchor companies and small-scale farmers. Currently, more than 80 percent of farmers in Nigeria are smallholder farmers.