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.

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.

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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:

• 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

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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.

• 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.

• 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]