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Business News

CBN reveals steps to access N500 million Creative Industry Financing Initiative

The Central Bank of Nigeria (CBN) has finally unveiled the steps and modalities to access the funds under the Creative Industry Financing Initiative (CIFI), which will enable businesses to access loans up to the tune of N500 million.

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Creative Industry Financing Initiative

The Central Bank of Nigeria (CBN) has finally unveiled the steps and modalities to access the funds under the Creative Industry Financing Initiative (CIFI), which will enable businesses to access loans up to the tune of N500 million.

The Central Bank disclosed this in a circular released on Thursday and addressed to all deposit money banks in Nigeria. According to the CBN, the newly released modalities for accessing the initiative is to officially kickstart the implementation of the creative industry financing scheme.

The Bankers’ Committee had earlier disclosed while unveiling the scheme that the decision to support the creative industry was borne out of the committee’s conviction that the sector holds the key to job creation, poverty reduction, and inclusive growth.

Funding the Initiative: The Central Bank also revealed that the scheme would be funded from the Agric-Business Small and Medium Enterprises Investment Scheme (AGSMEIS), an initiative of the bankers’ committee with a seed fund of N22.9 billion carefully appropriated.

Here is a breakdown of how the funds are allocated to the individual business unit:

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  • Student Software Development Loan – N1 billion
  • Information Technology – N5.5 billion
  • Movie Production – N3 billion
  • Movie Distribution – N4 billion
  • Music – N5.4 billion
  • Fashion – N4 billion

[ALSO READ: Access Bank Plc opens window for N20bn credit facility]

How you can access the loans: The Central Bank highlighted the Key features and modalities under each business category. Below is the breakdown of all the details required for the loans per business unit:

1. Student Software Development Loan: For a student software development loan, the sum of N3 million is accessible by each interested applicant.

  • It can be accessed with a 9% interest rate per annum.
  • Tenor is three years.
  • The repayment plan is on a monthly basis.
  • The moratorium is 9 months from date of the loan disbursement.
  • To be eligible for this, some of the security arrangements required include a University degree certificate, NYSC certificate, Credible Guarantor and Personal Guarantee.
  • Other conditions include gaining admission into a training organization that has job placement contract, no bad credit history with any bank and preference for areas with low IT penetration
  • Funding structure is the minimum equity contribution of 30% and 70% of deposit money Bank loan of 70%
  • The repayment source is from the proceeds of software sale or patent usage.

[ALSO READ: CBN Unveils the Creative Industry Financing Intiatives]

2. Movie Production: N50 Million can be accessed by each interested individual.

  • A 9% interest rate per annum
  • Tenor is 10 years.
  • The repayment plan is on a quarterly basis.
  • The moratorium is 24 months from date of the loan disbursement.
  • The major requirement includes a Minimum Equity Contribution of 30%, Legal Mortgage, All asset debenture, Credible Guarantor and Personal Guarantee.
  • Other conditions are minimum of three years relevant experience, no bad credit history with any bank and preference for areas with low cinema penetration.
  • Funding structure is the minimum equity contribution of 30% and 70% of deposit money Bank loan.

3. Movie Distribution: The sum N500 Million can be accessed by each interested business.

  • A 9% interest rate Per annum
  • 10 years repayment
  • The repayment plan is on a monthly basis
  • The moratorium is 24 months from date of the loan disbursement
  • Major requirements include a Minimum Equity Contribution of 30%, Legal Mortgage, All asset debenture and Personal Guarantee.
  • Other conditions are minimum of three years relevant experience, no bad credit history with any bank and preference for areas with low cinema penetration
  • Funding structure is the minimum equity contribution of 30% and 70% of deposit money Bank loan

4. Fashion: It involves equipment purchase and rental/service fees.

  • 9% interest rate per annum
  • The tenor is 10 years.
  • The repayment plan is a quarterly basis.
  • The moratorium is 36 months from date of the loan disbursement.
  • Security arrangement includes a minimum equity contribution of 20%, mortgage debenture, local mortgage and lien on stock of trade and items of equipment.
  • Other conditions include at least three referrals from recognised sponsors or bodies or associations. Minimum of three years of relevant experience and no bad credit history with any bank.
  • Funding structure is the minimum equity contribution of 20% and 80% of deposit money Bank loan.
  • Repayment source is proceeds of the business.

5. Information technology: It involves equipment purchase and rental/service fees.

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  • 9% interest rate per annum
  • Tenor is 10 years.
  • Repayment plan is a quarterly basis.
  • The moratorium is 36 months from date of the loan disbursement.
  • Security arrangement includes minimum equity contribution of 20%, mortgage debenture, local mortgage and lien on stock of trade and items of equipment.
  • Other conditions include at least three referrals from recognised sponsors or bodies or associations. Minimum of three years of relevant experience and no bad credit history with any bank.
  • Funding structure is the minimum equity contribution of 20% and 80% of deposit money Bank loan.
  • Repayment source is proceeds of sales or income from services provided.

6. Music: It also involves equipment purchase and rental/service fees.

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  • 9% interest rate per annum
  • Tenor is 10 years.
  • The repayment plan is a quarterly basis.
  • The moratorium is 36 months from date of the loan disbursement.
  • Security arrangement includes minimum equity contribution of 20%, mortgage debenture, local mortgage and lien on stock of trade and items of equipment.
  • Other conditions include at least three referrals from recognised sponsors or bodies or associations. Minimum of three years of relevant experience and no bad credit history with any bank.
  • Funding structure is the minimum equity contribution of 20% and 80% of deposit money Bank loan.
  • Repayment source is proceeds of music record sale or shows.

Banks to visit for loans: The Central Bank stated that prospective applicants should approach any bank with a business plan statement detailing how much is needed for their business proposal. All deposit money banks are eligible to participate in the initiative.

[Download full document: Modalities For Implementing CIFI]

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Companies

Nigeria’s border reopening will not impact profitability in 2021 – Flour Mills GMD

Flour Mills Nigeria Plc has stated that the recent reopening of the nation’s land borders will not affect the profitability of the company.

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Mr. Omoboyede Olusanya, the Group Managing Director of Flour Mills Nigeria Plc has disclosed that the recent reopening of the nation’s land borders will not adversely impact the performance and profitability of the company in 2021 and beyond.

He added that FMN will continue to leverage brand loyalty, product standardization and innovation, as well as improved cost efficiency to increase profitability in 2021.

This statement was made by the Olusanya during the company’s 9M’20/21 Investor Webinar which held virtually on January 26, 2020.

According to the statement made by Mr. Olusanya at the virtual meeting, the reopening of the nation’s land border will not affect the company’s sales and revenue, as Flour Mills Nigeria is focused on increasing operational efficiency with accelerated plans for cost optimizations across the group to ensure competitive product offerings and profitability in the new operating environment, occasioned by the border reopening.

He revealed that the company will continue to invest in local content development, production capacity and aggregation to strengthen product innovation and product standardization in a bid to foster brand loyalty.

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In line with this, Flour Mills Nigeria has invested heavily to upscale its Regional Distribution Centers (RDCs), in order to gain direct access to consumer market segments across the country, and expand consumer reach with the road to market initiatives and product offerings across the group, especially in the B2C segment.

Olusanya revealed that the group has successfully opened new regional distribution centers (RDCs) in Kano, Magboro and Abuja targeting the new fast-growing B2C product categories (fats, sugar and garri).

He added that the FMN Group among other strategic investments made, has invested in trucks to support the RDCs, animal feeds and starch value chains; as well as sales force automation platforms to ensure high-quality processes and services.

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He concluded that the activities of the company will be complemented by the efforts of the nation’s border security, as these agents would ensure that the borders do not become porous, and would help to curtail markets from being proliferated by imported items.

What you should know

  • Recall that Nairametrics reported that Flour Mills Nigeria Plc declared a profit of N5.65 billion in the third quarter ended, 31st December 2020.
  • The report revealed that the profit which Flour Mills made in the third quarter of its accounting year 2020/2021 rose by a whopping 150.36% when compared to the profit it made in the corresponding period of 2019.
  • It is important to note that the impressive performance of the company was driven by the agro-allied segment. The Agro-Allied segment benefited immensely from the August 2019 border closure, as the profit from this segment improved by 15,268%.

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Coronavirus

South African President appeals to wealthy countries not to hoard COVID-19 vaccines

South African President, Cyril Ramaphosa has called on the world’s wealthiest countries to stop “hoarding” vaccines.

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South Africa High commission in Nigeria shuts its offices, South Africa announces 21-day lockdown following spike in Coronavirus cases

The South African President, Cyril Ramaphosa has urged the world’s wealthiest countries to stop “hoarding” vaccines and called for an end to “vaccine nationalism.”

He made this call at the World Economic Forum’s virtual Davos Agenda event, where he clearly cautioned that some countries had ordered more supplies of vaccines than they needed, and that this was counterproductive to the global recovery effort.

According to him,

  • “Ending the pandemic worldwide will require greater collaboration on the rollout of vaccines, ensuring that no country is left behind in this effort”
  • “The rich countries of the world went out and acquired large doses of vaccines from the developers and manufacturers of these vaccines, and some countries have even gone beyond and acquired up to four times what their populations need”
  • “That was aimed at hoarding these vaccines and now this is being done to the exclusion of other countries in the world that most need this”

What they are saying

According to Africa CDC Director, John Nkengasong, the African continent is quite facing a “very aggressive second wave” of the pandemic, with mortality increasing on average 18% across the 55 African member states last week.

“We as a continent must recognize that vaccines will not be here when we want them, but as such we need to really focus on the public health measures that we know work”

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He however praised the progress of the African Vaccine Acquisition Task (AVAT) Team, which he said was created when AU nations realized “how the world’s richest countries are behaving.”

What you should know

  • South Africa is the country, worst hit by Covid-19 on the continent.
  • As at date, the country had recorded more than 1.4 million cases with 41,117 deaths.
  • The African Vaccine Acquisition Task (AVAT) Team has secured a provisional 270 million doses for AU member states directly, in addition to the 600 million expected from the World Health Organization’s COVAX initiative.

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Coronavirus

IMF optimistic about global economy but warns new Covid variants could affect recovery

IMF is quite optimistic about the fortune of the global economy but expressed fear that the new Covid variant could derail economic recovery.

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IMF

The International Monetary Fund (IMF) has expressed optimism about the global economy but warns that the new COVID 19 variant could affect the global economic growth, according to its latest World Economic Outlook.

According to the report, “the institution now expects the global economy to grow 5.5% this year — a 0.3 percentage point increase from October’s forecasts. It sees global GDP (gross domestic product) expanding by 4.2% in 2022”.

According to its Chief Economist, Gita Gopinath:

  • “Much now depends on the outcome of this race between a mutating virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens.
  • “There remains tremendous uncertainty and prospects vary greatly across countries.
  • China returned to its pre-pandemic projected level in the fourth quarter of 2020, ahead of all large economies. The United States is projected to surpass its pre-Covid levels this year, well ahead of the euro area.
  • “Policy actions should ensure effective support until the recovery is firmly underway, with an emphasis on advancing key imperatives of raising potential output, ensuring participatory growth that benefits all, and accelerating the transition to lower carbon dependence.”

What you should know

  • There has been a surge in the number of reported cases of the new variant Covid-19 infections and deaths over the past few months.
  • The new variant has been described as being more infectious and potentially deadlier than the original strain.
  • The IMF had cut its GDP forecasts for the euro zone this year by 1%.
  • It is being projected that the 19-member region, which has been severely hit by the pandemic, would grow by 4.2% this year.
  • Germany, France, Italy and Spain — the four largest economies in the euro zone — also saw their growth expectations cut for 2021.
  • Economic activity in the region slowed in the final quarter of 2020 and this is expected to continue into the first part of 2021. The IMF does not expect the euro area economy to return to end-of-2019 levels before the end of 2022.
  • IMF revised its GDP forecast upward by 2% points on the back of a strong momentum in the second part of 2020 and additional fiscal support, with GDP expected to grow to 5.1% this year.

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