- CBN Guidelines on How to Access COVID-19 Intervention Fund
In an effort to support businesses and curtail the impact of COVID-19 on the nation’s economy, especially the Micro, Small and Medium Enterprises (MSMEs) and families, the Central Bank of Nigeria has introduced a N50 billion Targeted Credit Facility for SMEs and households.
The stimulus package, according to the apex bank, will support households and MSMEs.
However, interested households and MSMEs would have to meet the CBN requirements in order to access the fund.
The apex bank said to access the fund, “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.
“NMFB shall appraise and conduct due diligence applications; upon satisfactory appraisal of application, NMFB shall forward the applications to the CBN for final approval; and CBN reviews applications and gives final approval for disbursement to NMFB.”
Also, eligible participants, households and existing businesses, are required to have verifiable evidence of business activities affected by the COVID-19 pandemic, business with a bankable plan and collateral.
Activity listed under the guidelines includes agricultural value chain activities, hospitality (accommodation and food services), health (pharmaceuticals and medical supplies), airline service providers, manufacturing/value addition, trading, and any other income-generating enterprises as may be prescribed by the CBN.
The bank named NIRSAL Microfinance Bank as the participating financial institution for the scheme.
The apex bank, however, said the loan amount would be determined based on the activity, cashflow and industry/segment size of beneficiary, subject to a maximum of N25 million for SMEs; and households could access a maximum of N3 million.
The bank added that “working capital would be a maximum of 25 per cent of the average of the previous three years’ annual turnover (where the enterprise was not up to three years in operation, 25 per cent of the previous year’s turnover would suffice).”