Dear SMEs, Here’s What you Need to Know About the CBN COVID-19 Intervention Fund

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The COVID-19 pandemic comes with many uncertainties for startups and MSMEs in Nigeria. Many businesses are experiencing low patronage as customer spending has dropped of recent. As such the impact is more acute.

Which is why the Federal government, through the Central Bank of Nigeria, has set up an intervention fund to mitigate the effects of this pandemic on businesses. The N50 billion Targeted Credit Facility (TCF) will be financed from the Micro, Small and Medium Enterprises Development Fund and will be managed by NIRSAL Microfinance Bank (NMFB).

The fund will serve as an incentive to support households and micro, small and medium enterprises (MSMEs) whose activities are affected by the coronavirus pandemic. The fund has a strong focus on businesses in the hospitality industry, Airline service providers, Health, Manufacturing/value addition, Trading as well as other businesses with evidence of operations affected by the COVID-19 pandemic.

Enterprises with bankable plans to take advantage of opportunities arising from COVID-19 are also eligible for the fund.

Interested MSMEs and businesses are to submit their applications for the loan to NMFB with clear evidence of the impact of the pandemic on their business. For others looking to take the opportunity from the pandemic, they are to provide clear evidence of the opportunity too.

Necessary collaterals for the application include; Moveable asset(s) that is duly registered on the National Collateral Registry (NCR); Simple deposit of title documents, in a perfect state; Irrevocable domiciliation of proceeds; Two acceptable Guarantor and Personal Guarantee of the promoter of the business; Life insurance of the Key Man, with NMFB noted as the First Loss Payee; Comprehensive insurance over the asset.

After submission, applications are reviewed by NFMB first. Upon approval they are passed on to the CBN for final ratification. Once granted, businesses will be disbursed their loans through the NFMB.

The loan amount to be disbursed will be determined based on the business’ operations, cash flow and industry/segment size of the beneficiary. However, there’s a maximum cap of N25 million for SMEs. The loan will be provided at an interest rate of 5% per annum up to February 28, 2021, after which it will 9% p.a will be charged.

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Upon disbursement of the loan, the NFMP will undertake periodic monitoring of the projects financed.

For those looking to latch on to the opportunities provided by COVID-19, they will have 1 year to pay back with no option of rollover. Others looking for long-term loans will have 3 years to pay back with a 1-year moratorium.

Already, NFMB says it has received over 80,000 applications and will begin disbursement of the first batch tomorrow. The scheme will be available until 31 December 2024 and you can apply here.

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