CBN COVID-19 Loan Application Portal www.cbn.gov.ng Update
CBN COVID-19 Loan: The COvid-19 outbreak has a severe impact on the livelihood of households and business activities resulting in to drop in global demand for goods and services, declined consumer confidence, and a slowdown in production among others. Thus the CBN had offered to give loans to individuals, households, and enterprises. Read through for updates on this.
The Coronavirus Disease (COVID-19) pandemic has led to unprecedented disruptions to global supply chains, a sharp drop in global crude oil prices, turmoil in global stock, and financial markets.
Leads to massive cancellation of sporting and entertainment events, the lockdown of large swaths movements of persons in many countries, and intercontinental travel bans/restrictions across critical air routes across the world.
These outcomes have had severe consequences on households’ livelihoods and business activities, resulting from a drop in global demand, declined consumer confidence, and a slowdown in production.
In this respect, the Central Bank of Nigeria (CBN) introduced the N50 billion Targeted Credit Facility (TCF) as a stimulus package to support households and Micro, Small, and Medium Enterprises (MSMEs) affected by the COVID-19 pandemic. The Application portal for this loan is www.cbn.gov.ng
CBN COVID-19 Loan
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
How to Access the CBN Covid-19 Intervention Fund for SMEs
The novel coronavirus outbreak has a severe impact on the livelihood of households and business activities resulting in 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.
Those Qualified for the CBN COVID-19 Loan
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.
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.
- The hospitality industry (accommodation and food services)
- Airline service providers
- Health (pharmaceuticals and medical supplies)
CBN Loan Limit
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.
CBN COVID-19 Loan Interest Rate
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.
CBN Loan Tenor
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, a one-year moratorium.
CBN COVID-19 Loan Collateral Requirement
The guideline states that the collateral to be pledged by the beneficiaries under the program 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
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CSN Team.
