CBN debunks Reports on Processing Fees For SMEs COVID-19 Loan Applications

Central Bank of Nigeria (CBN) has debunked that loan seekers and owners of small scale businesses that applied for its N50 billion special intervention fund meant to cushion the impact on the COVID-19 pandemic are expected to pay a certain amount of money.

 

According the debunked reports the designated administrator for the facility, NISRAL Microfinance Bank, has insisted that in order to process loan applications of struggling small businesses, applicants have to pay N10,000.

However, the Director, Corporate Communications, CBN, Mr. Isaac Okorafor in a statement stressed that, there is no processing fees for the loan applications.

In his words, “there are clearly spelt out procedures for accessing the N50 billion Targeted Credit Facility (TCF) stimulus package to support households and micro, small and medium enterprises (MSMEs) affected by the COVID-19 pandemic, which is disbursed through the NIRSAL Microfinance Bank (NMFB).

The Apex bank says interested stakeholders must meet its set criteria to access its N50bn intervention loans for small and medium scale enterprises.

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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.

“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.”

Businesses eligible for the scheme are agricultural value chain activities, hospitality, health (pharmaceuticals and medical supplies), airline service providers, manufacturing and value addition, and trading.

The bank stated that eligible participants were households and existing enterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic; and enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 pandemic.

The CBN said the loan amount would be determined based on the activity, cashflow and industry/segment size of beneficiary, subject to a maximum of N25m for SMEs; and households could access a maximum of N3m.

It stated 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).

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.