Central Bank of Nigeria has introduced a N300bn fund for real sector operators so as to improve output growth, value-added productivity and job creation in the country.
The CBN, in a circular on Wednesday said activities to be covered under the facility are new, start-ups and expansion projects in the manufacturing, agricultural value chain (non-primary production) and services.
The circular said its Development Finance Department shall be responsible for the day-to-day administration of the facility whose main objectives are to improve access to Nigerian Small and Medium-scale Enterprises to fast-track the development of the manufacturing, agricultural value chain and services sub-sectors of the economy.
The Circular stated “A borrower shall meet the following criteria to be eligible: any entity falling within the definition of an SME and/or manufacturer; an entity wholly-owned and managed Nigerian private limited company registered under the Companies and Allied Matters Act of 1990; a legal business operated as a sole proprietorship; be a member of the relevant organised private sector associations such as MAN, NASME, NACCIMA, NASSI, e.t.c.
“Loan amount is minimum of N500m up to a maximum of N10bn for a single obligor. Any amount above N10bn requires the special approval of management.
“Specifically, the CBN shall be entitled to earn 3 per cent as interest and the banks, a 6 per cent spread. Repayments under this facility shall be amortised.
“Loans shall have a maximum tenor of 15 years depending on the complexity of the project and shall terminate on December 31, 2030. Each project tenor shall be determined in relation to its cash flow and life of the underlying collateral.”