The novel coronavirus outbreak has a severe impact on the livelihood of households and business activities resulting to drop in global demand for goods and services, declined consumer confidence, and a slowdown in production among others.
The Federal Government through the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, Budget, and National Planning have announced some monetary and fiscal measures to help mitigate the impact of the coronavirus pandemic on the economy, Nigerian businesses, and households.
The CBN on its own, through various circulars and pronouncements, has announced some stimulus packages that will impact different sectors like the health sector, Micro Small and Medium Enterprises (MSMEs), manufacturers, households, and so on.
The apex bank introduced an N50 billion Targeted Credit Facility (TCF) as a stimulus package to support households and micro, small and medium enterprises (MSMEs) that are affected by the coronavirus pandemic
Why it matters: The TCF was designed 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 to stimulate credit to MSMEs to expand their productive capacity through equipment upgrade and research and development.
A. Who is TCF meant for?:
In the operational guideline for the facility, the CBN listed participants who are eligible to apply for credit from this facility. They are as follows;
- Households with verifiable evidence of livelihood adversely impacted by the coronavirus outbreak;
- Existing enterprises with verifiable evidence of business activities adversely affected as a result of the coronavirus pandemic (as part of its consistent review, CBN has declared that eligible applicant does not need to have a business plan),
- and firms in agricultural value chain activities.
- Hospitality industry (accommodation and food services)
- Airline service providers
- Health (pharmaceuticals and medical supplies)
- Manufacturing/value addition
- Trading and other income-generating activities as may be prescribed by the CBN.
B. Source of fund
The scheme shall be funded from the Micro, Small and Medium Enterprises Development Fund (MSMEDF) and the eligible participating financial institution for the scheme is NIRSAL Microfinance Bank (NMFB).
This means the CBN will be sourcing the fund from its MSME development fund which will be administered through NIRSAL Microfinance Bank. Thus, while the CBN will be providing the funds, applicants will have to apply for the loan through NIRSAL Microfinance Bank.
C. How to access the fund
There are two modalities here to consider. According to the CBN’s circular issued on March 23, 2020, the modalities apply to either Households/MSMEs or Corporate entity.
- The first step is for an eligible household to submit an application to NIRSAL MFB, which must, among others, contain BVN number, business registration (where applicable) and business plan with clear evidence of the opportunity or adverse impact as a result of COVID-19 pandemic
- NMFB shall appraise and conduct due diligence applications
- Upon satisfactory appraisal of application, NMFB shall forward the applications to the CBN for final approval,
- Then, CBN reviews applications and gives final approval for disbursement to NMFB.
Thus, applicants must endeavor to provide the documents listed above which are mostly basic. If you do not know how to write a business plan, you can get someone to help you with it.
For corporate entities
- Like their MSMEs counterparts, applications are submitted to NMFB with clear evidence of the opportunity or adverse impact as a result of COVID-19 pandemic.
- Also, NMFB shall appraise and conduct due diligence applications,
- After a satisfactory appraisal of the application, NMFB shall forward the applications to the CBN for final approval.
- CBN reviews applications and gives final approval for disbursement to NMFB.
Though, applicants may suffer certain setbacks due to communication gaps on the part of NMFB. For instance, one of the potential applicants, Kolade Emmanuel took to Twitter to make an enquiry about the loan that has not received feedback from the bank after one month. When Nairametrics contacted him, he said, “I have not heard from the bank in about one month after I have followed all necessary processes.”
D. Loan Terms
There are different criteria used to determine the loan amount that is disbursed to different eligible participants and segments. They are:
- SMEs- The loan amount shall be determined based on the activity, cash flow and industry/segment size of beneficiary subject to a maximum of N25 million for SMEs
- Households- They can access a maximum of N3 million. Working capital shall be a maximum of 25% of the average of the previous 3 years’ annual turnover. But where the enterprise is not up to 3 years in operation, 25% of the previous year’s turnover will suffice.
The CBN in its circular on the guidelines for the implementation of this facility stated that the interest rate under the intervention shall be 5% per annum (all-inclusive) up to February 28, 2021, and thereafter, the interest on the facility shall revert to 9% per annum (all-inclusive) as from March 1, 2021.
The guideline states that the loan for working capital shall be for a maximum of one year, with no option for rollover. As for the term loan, a maximum tenor of not more than 3 years with, at least, one-year moratorium.
The guideline states that the collateral to be pledged by the beneficiaries under the programme shall be as may be acceptable by NIRSAL MFB, but may include
- Moveable asset(s) that is duly registered on the National Collateral Registry (NCR);
- Simple deposit of title documents, in perfect state
- Irrevocable domiciliation of proceeds;
- Two acceptable Guarantor and
- Personal Guarantee of the promoter of the business
- Life insurance of the Key Man, with NMFB noted as the First Loss Payee
- Comprehensive insurance over the asset
E. Responsibilities of Stakeholders
Responsibility of the CBN
- Provide the seed fund for the scheme.
- Release funds to NIRSAL MFB for disbursement to successful applicants
- Review the guidelines of the facility as may be necessary
- Receive and process periodic returns from NIRSAL MFB
- Monitor and evaluate the implementation of the scheme by NIRSAL MFB.
Responsibility of NIRSAL MFB
they have the following responsibilities,
- Validate the status and BVN of the applicants
- Process and disburse funds to approved beneficiaries
- Maintain records of all beneficiaries and disbursements
- Forward periodic returns on the prescribed format on the scheme to CBN
- Comply with the guidelines
- Carry out any other duties as the CBN may prescribe from time to time.
F. Exit date:
The exit date of this intervention is December 31, 2024. It should be noted that this framework from CBN shall be subject to review from time to time as may be deemed necessary by the apex bank.
PayPal is buying a Crypto security startup for less than $200 million
PayPal is set to outrightly purchase a crypto-security firm, Curv as part of its campaign in building its crypto ecosystem.
PayPal is set to outrightly purchase a crypto-security firm Curv as part of its campaign in building its crypto ecosystem, the company disclosed today.
According to a report credited to CNBC, the deal is estimated to be worth less than $200 million, it’s expected to close before June this year.
The company’s stock price however recorded some selling pressures at the time of writing amid rising U.S Treasury yields and greenback keeping global investors on their toes.
The crypto startup about to be acquired by PayPal provides companies with Crypto security technology via the cloud. PayPal revealed that the purchase would help its expansion on supporting crypto.
“The acquisition of Curv is part of our effort to invest in the talent and technology to realize our vision for a more inclusive financial system,” PayPal’s Jose Fernandez da Ponte said in a statement.
In a press statement seen by Nairametrics, Dan Schulman, president, and CEO, PayPal, gave key insights on why the global payment company was going crypto; The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of; financial inclusion and access, efficiency, speed, the resilience of the payments system and the ability for governments to disburse funds to citizens quickly.
“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption, and inter-operability of these new instruments of exchange,” he said.
Furthermore, he said, “We are eager to work with central banks and regulators around the world to offer our support and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”
This offering was made possible through a partnership with Paxos Trust Company, a regulated provider of crypto services and products.
Transcorp Hotels launches Aura, an online marketplace for accommodation and experiences
Nigeria’s largest hospitality brand launches a new platform for booking vacation homes, holiday lets, and experiences.
Africa’s leading hospitality brand Transcorp Hotels Plc. has announced the launch of Aura, a new digital platform through which people can book accommodation, restaurants, and experiences.
The new brand, Transcorp’s first in the alternative accommodation segment, is part of the company’s asset-light model, leveraging technology to deliver true hospitality, exciting experiences, and drive shareholder value.
“It’s a new dawn in the hospitality industry! I am thrilled to introduce you to Aura by Transcorp, the digital platform we are using to connect people to quality accommodation, great food, and awesome experiences,” Managing Director and Chief Executive Officer of Transcorp Hotels Plc., Dupe Olusola said.
“For more than 30 years, Transcorp Hotels Plc has been at the forefront of creating a superior guest experience at our locations. Today, our commitment to innovation has offered us an opportunity to extend this beyond the hotel premises,” Olusola added.
The launch of Aura by Transcorp is one of the most significant developments in the company’s history as it seeks to transform the travel and tourism industry in Africa by focusing on three important components of travel, whether for leisure or business — where you stay, what you eat and how you spend your time. With its people-driven hospitality model, Aura is set to revolutionise travel and help remind Africans of our deep history of hospitality.
Speaking on the launch of Aura, Obong Idiong, Chief Executive Officer at Africa Prudential Plc, Aura’s technology partners, expressed his excitement. “Finding the right accommodation when you travel can be incredibly complex. Options available for the right prices are often limited, and travellers sometimes end up with accommodation that taints the travel experience. Transcorp Hotels Plc has been able to fix that with Aura and we are proud to be associated with them.”
“To ensure topnotch user experience, we built a solution to drive digital transformation through the adoption of shared living spaces for the Aura business. With an advanced search algorithm powered by artificial intelligence, Aura determines the relevance of locations taking into consideration, the customers’ preferences and requirements to meet them at the point of their needs,” Idiong added.
Priscilla Adeboye, a travel enthusiast and early adopter of Aura, said the global pandemic has pushed international travel down her list. “But I still want to be able to take some time off work or spend a weekend away from home with the family. I have found incredible homes on Aura that meet my need for space and privacy.”
Working with thousands of partners across Nigeria and different cities in Africa, Transcorp Hotels Plc. is building the continent’s largest platform for people-driven hospitality. While travellers enjoy the right selections at the best prices on Aura, hosts can also earn a lot of money by receiving guests in their unoccupied homes and sharing the local culture with them.
For travellers who would rather stay in hotels, Aura also has a great selection of some of the best hotels in every city.
With the launch of Aura, Transcorp Hotels Plc. has further cemented its leadership in the hospitality industry and reinforced its commitment to innovation and superior guest experience across different demographics.
Guests and hosts can sign up at aura.transcorphotels.com to start booking or hosting. The service is currently available in Nigeria only, but the company said plans are already in place to expand to major cities in Africa.
Transcorp Hotels Plc is one of Africa’s leading hospitality companies, committed to redefining service standards across the continent while remaining truly and authentically African.
Aura by Transcorp
Aura is Africa’s best platform for connecting travellers with great accommodation, good food, and memorable experiences. The platform is also an avenue for people with unoccupied homes, hotels, restaurants, or different skill sets that may interest others can earn an income by becoming hosts.
Nairametrics | Company Earnings
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- 2020 FY Results: Nigerian Breweries reports a 54.3% decline in profits in 2020