Central Bank of Nigeria will start the disbursement of the first tranche of N50billion COVID-19 fund.
The CBN had introduced the N50bn Targeted Credit Facility as a stimulus package to support households and Micro, Small and Medium Enterprises affected by the COVID-19 pandemic.
The N50bn intervention is being financed from the Micro, Small and Medium Enterprises Development Fund.
The fund, which is being managed by the NIRSAL Microfinance Bank, has received over 80,000 applications.
NIRSAL Microfinance Bank,Managing Director Mr Abubakar Kure, confirmed the development in a telephone interview
To access, it stated that, “Eligible households or MSMEs shall submit applications directly to NIRSAL Microfinance Bank; and the application 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.
In terms of limit, the loan amount would be determined based on the activity, cash flow and industry size of beneficiary, subject to a maximum of N25m for SMEs.
Households can access a maximum of N3m while working capital would be a maximum of 25 per cent of the average of the previous three years’ annual turnover.
Based on the guidelines released by the CBN, those that can benefit from the fund are 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.
According to the CBN guidelines, activities covered under the scheme include agricultural value chain; hospitality (accommodation and food services); health (pharmaceuticals and medical supplies); and airline service providers.
Others are manufacturing/value addition; trading and any other income-generating activities as may be prescribed by the CBN.
It added that interest rate under the intervention would be five per cent per annum (all inclusive) up to 28th February 2021 and thereafter, the interest on the facility would revert to nine per cent (all inclusive) as from 1st March 2021.
The regulator stated that working capital would be for a maximum period of one year, with no option for rollover, while term loan would have a maximum tenor of not more than three years with, at least, one year moratorium.
Kure, who did not provide the amount to be disbursed in the first tranche, said that those whose applications were successful would start receiving their fund on Thursday.
But we are hopeful that towards Thursday or Friday, the disbursement of the fund would commence.”