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How to apply for a CBN Covid-19 fund of N50 billion for small businesses : Nigerian Education

How to Apply for a NBN 50 billion CBN Covid-19 Fund for Small Businesses – The novel outbreak of the corona virus has a serious impact on household livelihoods and business activity, which among other things leads to a decline in global demand for goods and services, a decline in consumer confidence and a slowdown in production. Apply here!

Through the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, Budget and National Planning, the federal government has announced some monetary and tax measures to mitigate the effects of the coronavirus pandemic on the economy, Nigerian businesses, and households.

The CBN alone has announced the CBN Covid-19 Fund through various circulars and announcements, which will affect various sectors such as health care, small and medium-sized enterprises (MSMEs), manufacturers, households, etc.

Apex Bank launched a CBN Covid-19 Fund Targeted Credit Facility (TCF) of N50 billion to help households and micro and small and medium-sized enterprises (MSME) from the coronavirus pandemic are affected

Why is it important?: The TCF was developed to cushion the adverse effects of COVID-19 on households and MSMEs. Supporting households and MSMEs whose economic activities have been significantly impacted by the COVID-19 pandemic and promoting loans to MSMEs to expand their production capacity through equipment upgrade and research and development.

Who is TCF for?: In the facility operating policy, the CBN listed participants who are eligible to request credit for this facility. These are households with demonstrable proof of livelihood that are affected by the outbreak of the corona virus. Existing companies with demonstrable evidence of doing business that has been affected by the coronavirus pandemic (As part of its rigorous review, CBN has stated that an eligible applicant does not need a business plan.)and companies in the agricultural value chain.

Others are the hotel industry (accommodation and catering services), airline service providers, health (pharmaceuticals and medical care), manufacturing / value creation, trade and other income-generating activities as required by the CBN.

Source of the fund: The program is funded by the Development Fund for Micro, Small and Medium-sized Enterprises (MSMEDF) and the participating financial institution eligible for the program is the NIRSAL Microfinance Bank (NMFB).

How to access the fund: There are two modalities to consider here. According to the CBN circular issued on March 23, 2020, either households / MSMEs or companies.

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How to apply for a CBN Covid-19 fund of N50 billion for small businesses

For households / MSME,

  • The first step is for an eligible household to submit an application to NIRSAL MFB, which must include the BVN number, company registration (if applicable) and the business plan with clear evidence of the possibility or adverse effects of COVID-. 19 pandemic
  • The NMFB reviews and carries out due diligence applications
  • After a satisfactory examination of the application, the NMFB forwards the applications to the CBN for final admission.
  • CBN then reviews the applications and grants NMFB final admission for payment.

For companies,

  • As with their MSME colleagues, applications are submitted to the NMFB with clear evidence of the possibility or adverse effects of a COVID 19 pandemic.
  • NMFB also evaluates and leads due dates Due diligence,
  • After a satisfactory examination of the application, the NMFB forwards the applications to the CBN for final admission.
  • CBN reviews applications and grants NMFB final admission for payment.

However, applicants may experience certain setbacks due to NMFB communication gaps. For example, Kolade Emmanuel, one of the potential applicants, visited Twitter to make a request. After one month, the bank did not receive any feedback from the bank. When Nairametrics contacted him, he said, “I haven’t heard from the bank in about a month after following all the necessary processes.”

Dear NMFB AGSMEIS customer, please note that the costs for EDI training are 10,000 N, while the mini-business plan is only 5,000 N. We noticed that some centers charge additional fees, please ignore them and report them [email protected] or call 094621730.

Credit limit: There are several criteria used to determine the amount of the loan that will be paid to different eligible participants and segments. You are:

  • SME – The loan amount is determined based on the beneficiary’s activity, cash flow and industry / segment size, with a maximum of SMEs of N 25 million
  • Households – You can access a maximum of N3 million. Working capital may not exceed 25% of the average annual turnover for the past three years. However, if the company has not been in operation for more than 3 years, 25% of the previous year’s turnover is sufficient.

Interest rate: In its circular on the guidelines for the implementation of this facility, the CBN stipulated that the interest rate under the intervention should be 5% per year (all-inclusive) by February 28, 2021. After that, interest rates on the facility will be reset to 9% per year (all inclusive) from March 1, 2021.

Loan tenor: The directive states that the working capital loan can last a maximum of one year without a rollover being possible. With regard to the temporary loan, a maximum term of up to 3 years with a moratorium of at least one year.

Collateral requirement: The directive states that the collateral to be pledged by the beneficiaries under the program must be as accepted by NIRSAL MFB, but may also include

  • Movable assets duly registered in the National Collateral Registry (NCR);
  • Easy deposit of title documents in perfect condition
  • Irrevocable domiciliation of proceeds;
  • Two acceptable guarantees and
  • Personal guarantee from the organizer
  • Key Man life insurance with NMFB as First Loss Payee
  • Comprehensive insurance on the asset

Stakeholder responsibilities

The CBN is supposed to;;

  • Provide the seed capital fund for the program.
  • Release funds to NIRSAL MFB for disbursement to successful applicants
  • If necessary, check the guidelines of the institution
  • Receive and process regular returns from NIRSAL MFB
  • Monitoring and evaluation of the implementation of the system by NIRSAL MFB.

As for NIRSAL MFByou have the following responsibilities:

  • Check the applicant’s status and BVN
  • Processing and payment of funds to approved beneficiaries
  • Keep records of all beneficiaries and withdrawals
  • Forward periodic returns to CBN in the prescribed format of the schema
  • Follow the guidelines
  • Carry out all other tasks that the CBN requires from time to time.

Starting date: The withdrawal date for this intervention is December 31, 2024. It should be noted that this framework is subject to periodic reviews from CBN that Apex Bank deems necessary.

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