The Central Bank of Nigeria has listed basic conditions that applicants to its N100 billion credit facility, particularly those in the health sector, must meet before they qualify to benefit from the facility.
The scheme, which was planned to be funded from the Real Sector Support Facility – Differentiated Cash Reserves Requirement, is to have an interest rate of 5% per annum until March 1, 2021, when it will revert back to 9%.
However, the operations of this scheme have not been as smooth as expected, because some operators in the sector have been complaining about not having access to the funds.
But in an interview, CBN’s Director for Development Finance, Mr. Yusuf Yila, said the apex bank has so far received applications in excess of N62 billion.
“When these applications come on, as a Central bank what we are looking at is how many jobs take for example a pharmaceutical company can expand its line or build new capacity, how jobs are going to be created, how many of the raw materials are going to be sourced locally, how much foreign exchange is the country going to be conserving.
“Those are the things we actually look for in these applications. We are not going to be doling out money for people who are going to be importing or going to source for foreign exchange for materials we can source locally. I can also tell you as at today the central bank has disbursed in excess of N11 billion out of N100 billion and this week we are taking to Governor Emefiele another set of applications in excess of N20 billion from 9 banks.”
The CBN Director also emphasised that there is a process involved in disbursing the loans and that the major idea is to conserve foreign exchange. He also explained that the pharmaceutical industry is worth over $1.3 billion and out of this, about $900 million is imported.
On the interest rate, the CBN Director pointed out that the apex bank’s policy response goes beyond the 5% interest rate. He said the beneficiaries are also granted an additional moratorium of 1 year for all the over 26 intervention programmes in the portfolio of the Central Bank. Going further, businesses that are eligible can access the N100 billion fund at 5% till March 1, 2021, he said.