The novel coronavirus outbreak has a severe impact on the livelihood of households and business activities resulting to drop in global demand for goods and services, declined consumer confidence and 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.
The CBN on its own, through various circulars and pronouncements, has announced some stimulus packages that will impact on 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
Why it matters: 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.
Who is TCF meant for?: In the operational guideline for the facility, the CBN listed participants who are eligible to apply for credit from this facility. They are 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.
Others are hospitality industry (accommodation and food services), Airline service providers, Health (pharmaceuticals and medical supplies), Manufacturing/value addition, Trading and other income-generating activities as may be prescribed by the CBN.
Source of fund: The scheme shall be funded from the Micro, Small and Medium Enterprises Development Fund (MSMEDF) and the eligible participating financial institution for the scheme is NIRSAL Microfinance Bank (NMFB).
How to access the fund: There are two modalities here to consider. According to the CBN’s circular issued on March 23, 2020, either Households/MSMEs or Corporate entity.
For Households/MSMEs,
- The first step is for an eligible household to submit an application to NIRSAL MFB, which 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,
- Then, CBN reviews applications and gives final approval for disbursement to NMFB.
For corporate entities,
- Like their MSMEs counterparts, applications are submitted to NMFB with clear evidence of the opportunity or adverse impact as a result of COVID-19 pandemic.
- Also, NMFB shall appraise and conduct due diligence applications,
- After satisfactory appraisal of application, NMFB shall forward the applications to the CBN for final approval.
- CBN reviews applications and gives final approval for disbursement to NMFB.
Though, applicants may suffer certain setbacks due to communication gaps on the part of NMFB. For instance, one of the potential applicants, Kolade Emmanuel took to Twitter to make an enquiry about the loan has not received feedback from the bank after one month. When Nairametrics contacted him, he said, “I have not heard from the bank in about one month after I have followed all necessary processes.” – Source: Nairametrics
2 Comments
My name is IFIOK Sunday Bassey, advice is that the federal government should shared the #50billion in the 774 local government area which is the council chairman, house of assembly member,and commissioner from each local government will be hold responsible, because from local government we know the poor hold women which have no Bvn in Bank,which can share the money from local government to villages.
I am a business owner, my business needs funding, I am an employer of labour. Please where do I go to access funds for our business, we need funds to come back to business.