The Central Bank of Nigeria (CBN) had on Thursday said that interest rate on its health intervention facility, which was reduced to 5% over a week ago, shall revert to 9% p.a. (all-inclusive) as from 1st March 2021.
The CBN had introduced a N100 billion credit support intervention for the health sector as part of the measures to mitigate the effect of the Coronavirus pandemic on the economy.
As a follow-up, the apex bank, on Thursday issued operational guidelines for credit support to the healthcare sector for indigenous pharmaceutical companies and healthcare practitioners that hope to build or expand their capacity.
The operational guideline, which was signed by Kevin Amugo, Director, Financial Policy and Regulation, CBN, stated that interest rate under the intervention shall be at not more than 5% per annum, (all-inclusive) and is valid up until February 28, 2021.
This scheme is going to be funded from the Real Sector Support Facility – Differentiated Cash Reserves Requirement (RSSF-DCRR).
The objectives of the scheme include:
- improving access to affordable credit by indigenous pharmaceutical firms in order to expand their operations;
- reducing medical tourism in order to conserve foreign exchange; and
- providing long-term, low-cost finance for healthcare infrastructure development that would lead to the evolvement of world-class healthcare facilities in the country, reduce the cost of healthcare delivery in the country and so on.
Stakeholders, who are eligible under the scheme are:
- healthcare product manufacturers which include pharmaceutical drugs and medical equipment;
- healthcare service providers/medical facilities which include hospitals/clinics, diagnostic centres/laboratories, fitness and wellness centres, rehabilitation centres, dialysis centres, blood banks, etc.;
- pharmaceutical/medical products distribution and logistics services; and
- other human healthcare service providers as may be determined by the CBN from time to time.
Financial institutions like the Deposit Money Banks (DMBs); and Development Finance Institutions (DFIs) are ineligible.
The guidelines show that the collateral to be pledged by borrowers under the programme shall be as may be required under the RSSF-DCRR.
The apex bank said periodic joint monitoring of activities financed under the Scheme will be conducted by the PFI and the CBN.
Also, the CBN has issued the guidelines for the implementation of the N50 billion targeted credit facility for households and Small and Medium Scale Enterprises (SMEs that have been particularly hard hit by the Coronavirus.
The broad objectives of the CBN’s N50 billion Targeted Credit Facility include cushioning the adverse effects of coronavirus on households and MSMEs; supporting households and MSMEs whose economic activities have been significantly disrupted by the coronavirus pandemic; stimulating credit to MSMEs to expand their productive capacity through equipment upgrade, and research and development.