The Central Bank of Nigeria (CBN) recently kick-started the 100 for 100 Policy on Production and Productivity, targeted at private companies willing to apply for a loan to fund a project.
Last month, CBN Governor Godwin Emefiele said that the policy would take prospective beneficiaries through a process of scrutiny before they would be deemed eligible for the loan. Selected companies can apply for loans of up to N5 billion under the 100 for 100 policy.
The CBN will use Key Performance Indicators (KPIs) to evaluate whether or not the company can have a direct impact on the nation’s economy. It was also confirmed that the policy would involve 100 companies in 100 days, before rolling over to the next 100 days. The interest rate on the loans under the policy will not be higher than 5.0% p.a. until February 28th 2022 when it will revert to 9% p.a.
The Key Performance Indicators to be considered by the CBN include: rate of growth in production output, increase in capacity utilization, increase in export volume, increase in export value, decrease in industrial raw material import volume, decrease in industrial raw material import value, and increase in a number of jobs generated.
The companies interested must submit applications to their Participating Financial Institutions (PFIs, i.e. banks partnering with the Central Bank in the policy execution), together with the necessary documents. Some of the documents required for the application include Financial statements, certified copies of the company’s registration with the Corporate Affairs Commission (CAC), three years of audited finances, evidence of the company’s worthiness, at least two credit reports of the company and directors.
Other necessary documents include a business plan of the project for which the loan is being acquired, and a detailed status report on the project’s capacity utilization, production output, efficiency level, employment level, export capacity, and value creation. Companies also need to provide projections of increased capacity utilization, production output, productivity level, employment level, export capability, and value creation in order to represent the project’s economic benefits after financing. Applicants will notify the CBN of submitted applications through a dedicated online portal on the official website at 100 for 100 ppp.
Once the lending bank receives the application, it will conduct due diligence based on business and credit. After that, the bank will forward the applications of the eligible private companies to the CBN for approval by the appropriate Private Finance Initiative Credit Committee.
The CBN will then screen and accept eligible companies for 100 days, before rolling over to the next 100 days. After that, the CBN will release the approved amount to the Participating Financial Institution for disbursement to the selected private companies. The successful beneficiaries will be published nationally for Nigerians to verify with details of the facility granted, operating sector, manufacturing activities that have been financed, and Participating Financial Institution.
