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Business News

CBN discloses conditions for assessing N100 billion credit facility, addresses ‘process problems’

The operations of this scheme have not been as smooth as expected, because some operators in the sector have been complaining about not having access to the funds.

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As part of measures to mitigate the impacts of COVID-19 on businesses, particularly those in the health sector, the Central Bank of Nigeria (CBN) had introduced a N100 billion credit intervention scheme.

The scheme, which was planned to be funded from the Real Sector Support Facility – Differentiated Cash Reserves Requirement, is to have an interest rate of 5% per annum until March 1, 2021, when it will revert back to 9%.

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However, the operations of this scheme have not been as smooth as expected, because some operators in the sector have been complaining about not having access to the funds.

In a recent TV interview, the CBN’s Director for Development Finance, Mr. Yusuf Yila, discussed some basic conditions that applicants to the CBN N100 billion credit facility must meet before they qualify to benefit from the facility. On the disbursement of the N100 billion facility, Yila said:

As at today, we have received applications in excess of N62 billion. These funds are to be disbursed by the banks. When these applications come on, as a Central bank what we are looking at is how many jobs take for example a pharmaceutical company can expand its line or build new capacity, how jobs are going to be created, how many of the raw materials are going to be sourced locally, how much foreign exchange is the country going to be conserving.

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Those are the things we actually look for in these applications. We are not going to be doling out money for people who are going to be importing or going to source for foreign exchange for materials we can source locally. I can also tell you as at today the central bank has disbursed in excess of N11 billion out of N100 billion and this week we are taking to Governor Emefiele another set of applications in excess of N20 billion from 9 banks.”

(READ MORE:CBN health intervention fund gets new interest rate by March 2021)

The CBN Director also emphasised that there is a process involved in disbursing the loans and that the major idea is to conserve foreign exchange. He also explained that the pharmaceutical industry is worth over $1.3 billion and out of this, about $900 million is imported.

COVID-19: NCDC equips testing centres in Ibadan, Abakaliki as figures continue to rise, CBN discloses conditions to assess N100b facility, identifies problems in processing facility

A medical professional using medical equipment

On the complaints by some applicants about the strenuous processes involved in assessing the loan and the kind of collateral required, Yila said:

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Yes it is a credit support intervention to the sector and it’s not a grant. It’s a loan and anytime the bank gives out a loan, there are certain conditions precedent that must be met. Because of the lockdown, they receive applications by email, we work with the banks to carry out due diligence. Typically, things that take 3, 4 weeks to do, we have cut it down to 2 days.

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‘’I tell you that the biggest problem we are having is that most pharmaceutical companies or the hospitals that have submitted applications to access these funds have provided incomplete documentation. That is a source of worry because while we are in an emergency situation, due diligence must be followed.

I told you this is a loan and not a grant and the central bank has been very favorably disposed of. We tell you what we have also done, if you read the guideline, we are aware that hospitals, it takes a very long time to recoup its investment, so the facility is for a long term up to 10 years.”

(READ MORE:CBN slashes special interest rate to 5%, directs banks to restructure loan terms)

On the interest rate, the CBN Director pointed out that the apex bank’s policy response goes beyond the 5% interest rate. He said the beneficiaries are also granted an additional moratorium of 1 year for all the over 26 intervention programmes in the portfolio of the Central Bank.  Going further, businesses that are eligible can access the N100 billion fund at 5% till March 1, 2021, he said.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- chike.olisah@nairametrics.com.

2 Comments

2 Comments

  1. Favour

    May 23, 2020 at 1:55 pm

    Central bank of Nigeria and access bank should stop debiting me unnecessarily. So if i make transaction above 200,000 each day they will debit 200k from my account outside the charges of the made transaction. Because this stamp fee of every week I’m not getting it.
    As a citizen of the country I’m not benefiting anything from my country, no job nothing at all but after hustling to make some cash it will just be going like that in the name of CBN rules. The next thing to do is to withdraw all my money out from that bank.

  2. Kola OLAITAN

    May 24, 2020 at 11:31 pm

    I guess you mean accessing

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Economy & Politics

CBN reacts to videos, pictures of new N2,000 and N5,000 in circulation

The videos and pictures of the purported circulation of the N2,000 and N5,000 banknotes as false, a piece of fake news that is being pushed out to the members of the public and asked them to disregard the falsehood.

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Mobile money loan CBN Governor, CBN, Three PSBs get Apex Bank’s provisional to commence operations, Milk Import: Experts advise CBN on FX restriction , CBN automates trading system, introduces electronic form to facilitate exports , CBN campaigns for Made-in-Nigeria products 

The Central Bank of Nigeria (CBN) has reacted to the circulated videos and pictures that claimed it had introduced N2,000 and N5,000 banknotes to members of the public.

The apex bank in a statement described the videos and pictures of the purported circulation of the N2,000 and N5,000 banknotes as false and a piece of fake news that is being pushed out to the members of the public and asked them to disregard the falsehood.

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Going further, they asked the members of the public to report to law enforcement agencies if they found anyone in possession of such banknotes.

This was disclosed by the Central Bank of Nigeria in a tweet post on its official twitter handle on Sunday, May 31, 2020.

The CBN stated, ‘’Videos and pictures of purported circulation of N2,000 and N5,000 banknotes are false and fake. Members of the public are advised to disregard such falsehood and to report anyone found in possession of such banknotes to the law enforcement agencies’’.

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https://twitter.com/cenbank/status/126713171778308505

It would be recalled that the planned introduction of the new N2,000 and N5,000 banknotes by the CBN under the leadership of the then Governor, Lamido Sanusi, in 2012, had elicited some mixed reactions from some experts.

The Federal Government at that time said that the proposed N5,000 banknotes will not be for mass circulation, but would only be reserved for banks and heavy cash users.

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Business News

UPDATED: CBN revises timelines for resolution of dispense errors, refund complaints

The apex bank said this is in line with its resolve to enhance the quality of service bank customers are given. Nigerian banks are, therefore, required to implement the revisions starting from June 8, 2020.

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The Central Bank of Nigeria, CBN, has revised the timeframes for the resolutions of all botched online transfers, POS transactions, and ATM withdrawals.

According to a brief statement that was posted on its official Twitter handle this evening, the apex bank said this is in line with its resolve to enhance the quality of service bank customers are given. Nigerian banks are, therefore, required to implement the revisions starting from June 8, 2020.

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Below are the revisions

In line with the revisions, any failed ATM transaction that occurs when a customer tries to withdraw from their bank must be reversed instantly. In the event that instant reversal fails due to technical challenges, the money must be manually reversed within a 24-hour period. Note that prior to the revision, the timeframe for such reversal is usually three working days.

Similarly, the resolutions for failed ATM withdrawals occurring when bank customers use their ATM cards on other banks should not exceed 48 hours, the CBN said. Before now, such a resolution would normally take three working days.

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Also, starting from June 8, banks will be required to resolve all disputed/failed online transfers and POS transactions within 72 hours. In other words, resolution for such disputes shall no longer be taking five working days as it used to.

In the meantime, the apex bank advised banks to ensure that all pending failed transactions/complaints are resolved “within two weeks starting June 8, 2020”.

“Meanwhile, key service providers in the Nigerian payments system have also committed to establish an integrated dispute resolution platform for the industry and enhance their payment system infrastructure and processes to reduce incidences of transaction failure,” the statement further disclosed.

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Tech News

Why Nigeria must invest in digital technology – El Rufai

Nigeria needs to look for a way to move from the agrarian and industrial into the services sector, and ICT is a way to do that.

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El-Rufai: How Vodafone recorded its ‘biggest’ investment mistake in Nigeria, FG concludes plan to borrow N2 trillion from Pension Fund, Infrastructure: Tapping into pensions funds - a step in the right direction? 

If Nigeria is to join the richer countries of the world, she must invest aggressively in technology, improve local production, and cut cost of governance.

These were some of the opinions presented by experts during a virtual colloquium tagged Government Unusual: Innovative Economic Solutions to Unlock Mass Prosperity held on Saturday afternoon.

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While making a presentation at the Rauf Aregbesola colloquium, Governor Nasir El Rufai noted that investment in digital technology must become a priority if Africa hoped to join the league of developed countries. He said,

Investing aggressively in digital technology is the only way Africa can preserve its growth and continue to lift people out of poverty. We must invest in the digital because henceforth, every sector of governance and living will depend on the digital.

READ ALSO: FG sets committee to support tech start-ups with affordable internet access amid lockdown

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He added that one of the lessons from the COVID-19 pandemic was the need for Nigeria to embrace technological advancement so that Nigerians could benefit from the numerous opportunities that came with it; and pointed at the recent decision to crash right of way charges as the first way to go.

In agreement with his position, CEO Lotus Capital, Mrs Hajara Adeola, added that investment in technology was the best way to get Nigerian youths to take advantage of global opportunities without migrating to other countries.

Nigeria needs to look for a way to move from the agrarian and industrial into the services sector, and ICT is a way to do that. Our youths are innovative and capable, so if we can train our youths in technology, then we can get homegrown solutions to some of our issues without them having to migrate” she said during the panel discussion.

Infrastructure for business

Unless infrastructural developments are shaped and directed towards business developments, the country will continue to invest in infrastructure which have no benefits.

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“You don’t shape infrastructure as how you think it makes sense. you do it in a way that follows the money because ultimately that is where prosperity comes for everybody,” Chairman of Citibank Nigeria limited, Yemi Cardoso said.

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The global terrain continues to change and Nigeria must develop a framework to align its growth strategy with the changes, identifying and eliminating bottlenecks as we go forward.

The colloquium, which was held online (via zoom), had over 700 participants across several countries, and was also streamed live on Youtube.

Panelists at the colloquium were Mallam Nasir El-Rufai, Governor, Kaduna State; Sen. Abubakar Bagudu, Governor, Kebbi State; Mrs. Hajara Adeola, CEO, Lotus Capital Limited; Mr. Bismarck Rewane, CEO, Financial Derivatives; Dr. Joe Abah, Country Director, Development Alternatives Incorporated (DAI); Dr. Yemi Cardoso, Chairman, Citibank Nigeria, and Boason Omofaye, the Moderator.

Dr Yemi Kale, Statistician General of the federation and CEO of the National Bureau of Statistics (NBS) was also present.

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