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Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN , To test FX market, CBN pumps $50 million, CBN issues guidelines to Finance Institutions on establishment of Subsidiaries and SPVs, CBN injects $2.63 billion to defend naira in one month, CBN’s COVID-19 N50 billion targeted credit facility, CBN’s heterodox policies buoys credit growth, These industries drove business activities in September, Credit to Nigerian economy falls to N38.67 trillion as private stagnates at N30 trillion, Availability of secured credit to businesses and households increases as unsecured credit to households dips in Q3 2020 - CBN, CBN releases regulatory guidelines on the eNaira

CBN’s COVID-19 N50 billion targeted credit facility

CSL StockbrokersbyCSL Stockbrokers
3 years ago
in Business News, Coronavirus, MSME
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The Central Bank of Nigeria (CBN) earlier this week released the guidelines for the implementation of its N50 billion targeted credit facility for households and Small and Medium-Scale Enterprises that have been hard hit by the effects of the COVID-19 virus.

According to the CBN, the objectives of the fund are to

  • cushion the adverse effects of COVID-19 on households and MSMEs;
  • support households and MSMEs whose economic activities have been significantly disrupted by the COVID-19 pandemic; and
  • stimulate credit to MSMEs to expand their productive capacity through equipment upgrade, research and development.

The guidelines further provide that those eligible for the funds will be households with verifiable evidence of livelihood adversely impacted by COVID-19, existing enterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic and enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 pandemic.

Notably, the scheme will be financed from the Micro, Small and Medium Enterprises Development Fund (MSMEDF) and will attract an interest rate of 5% per annum till 28 February 2021, after which the interest rate will be increased to 9% per annum.

[READ MORE: Manufacturing: Activity level slumps on COVID-19)

The maximum loan amount will be N25m for SMEs and N3m for households. Tenor of the loan will be a maximum of 1 year for working capital loans and a maximum of 3 years for term loans with at least one year moratorium. The scheme will be done in partnership with NIRSAL Microfinance Bank (NMFB) and collateral requirement will be as acceptable by NIRSAL.

IMF says it can mobilize $1 trillion loan to help countries counter Coronavirus

While we believe the credit stimulus will help in mitigating the adverse effects of the COVID-19 outbreak on an already beleaguered household as well as SMEs, we are concerned about the accessibility of the funds to those are really in dire need of it, considering the bureaucratic process involved in accessing such funds and paucity of accurate and reliable data on the informal sector.

Based on the guidelines provided, one question that readily comes to mind is “what will be considered verifiable evidence of livelihood adversely impacted by COVID-19”.

That said, we expect sustained disruption of economic activities as the outbreak of COVID-19 continues to worsen in Nigeria, with the daily increase in the number of confirmed cases in the commercial hub of the country, Lagos.

READ MORE: COVID-19: Startups groan over losses, may shutdown in months

Taking cognisance of the disruption to global supply chains, brought about by the lockdown policy implemented across the globe, we think SMEs who are reliant on importation of raw materials for production will be significantly affected, affecting their production cycles and in turn cashflows. Consequently, we believe the credit stimulus will help in keeping them afloat in the interim, at least pending when normalcy returns to economic activities.

_______________________________________________________________________

CSL STOCKBROKERS LIMITED CSL Stockbrokers,

Member of the Nigerian Stock Exchange,

First City Plaza, 44 Marina,

PO Box 9117,

Lagos State,


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Tags: CBNCentral Bank of NigeriaCoronavirusCovid-19credit stimulus
CSL Stockbrokers

CSL Stockbrokers

Comments 20

  1. IshaqIbrahim says:
    April 10, 2020 at 6:10 pm

    Pls I am a business for furniture .and I need spot to develop my company.

    Reply
    • Tolulope says:
      June 23, 2020 at 7:24 am

      Hello my sir am a furniture please sir I won’t development my company

      Reply
  2. Hardship of living which makes me to see for investment loan. says:
    April 13, 2020 at 12:02 pm

    The major that the federal government of our great nation Nigeria are taking regarding this Covid 19 is an interesting mathod. May the almighty God bless our Government and protect our people with our nation.

    Reply
  3. Musipirinye Ataisi says:
    April 16, 2020 at 3:54 pm

    I need loan for my agricultural business.
    I also need to set up large frozen food company. Want it to be an inter_state
    business.

    Reply
  4. Sabitu RABIU kiri says:
    April 19, 2020 at 1:09 am

    If one apply for covid19 CBN loan, when and how shall be called for further screening? When the disbursement be started?

    Reply
  5. abba bello says:
    April 22, 2020 at 9:06 am

    good to see this

    Reply
  6. Haruna bala says:
    June 2, 2020 at 12:55 am

    When you help our people god to protect you help my business to develop up

    Reply
  7. AMMAR says:
    June 14, 2020 at 8:52 am

    i need some money to continue my businesses

    Reply
  8. tanimumustapha says:
    June 14, 2020 at 10:51 am

    I needed your helps, because I want go on of my study,in order to become computer engineer.God help you.

    Reply
    • Sunday wemimo ojo says:
      June 21, 2020 at 4:31 pm

      Thanks for good assistance,I need help hand like loan to increase my business.thanks in advance Sunday wemimo.

      Reply
  9. Haruna Lawan says:
    June 17, 2020 at 6:34 am

    Thank

    Reply
  10. Bashir yau says:
    June 19, 2020 at 9:51 pm

    i so much appreciate the policies of this present administration because they are the best for the economic development of the country

    Reply
  11. Abubakar B.Sallah says:
    June 30, 2020 at 5:46 am

    I appreciate the policies of this present administration

    Reply
  12. Abubakar abdullahi babangida says:
    July 23, 2020 at 5:24 pm

    I Ned help in our business to increasing my capital.

    Reply
  13. shamsu says:
    May 19, 2021 at 11:12 am

    good job

    Reply
  14. SHAMSUDDEEN says:
    May 31, 2021 at 11:50 pm

    Thanks for good asistance,PLEASE i need your help becouse i want start business INSHA ALLAH.

    Reply
  15. SHAMSUDDEEN says:
    June 1, 2021 at 12:14 am

    Thanks for your good asistance,PLEASE i need your help like loan i won’t start business INSHA ALLAH.

    Reply
  16. Zulkifli Ali Rabiu says:
    June 14, 2021 at 6:14 am

    Iam I need really I want this loan to promote my business and life

    Reply
  17. Zulkifli Ali Rabiu says:
    June 14, 2021 at 6:21 am

    I am in need really I want this loan to promote my business and life

    Reply
  18. shettima bukar says:
    February 14, 2022 at 5:18 pm

    i applied for covid 19 loan twice but non

    ievisvapproved

    Reply

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