approves new N50bn intervention fund for MSMEs …MAN, NASME, others laud monetary measures
The Central Bank of
Nigeria (CBN) has dropped interest rates on all its intervention funds from 9
percent to 5 percent. This is even as the apex bank also announced additional
N50bn intervention fund to micro, small and medium enterprises (MSMEs) to
mitigate the negative impact of the pandemic on the affected enterprises
nationwide. The CBN Governor, Mr. Godwin Emefiele, who made these
disclosures on Monday while briefing the media on strategic measures by the
bank to tackle the challenges raised by the virus within the domestic economy,
also announced other interventions to cover healthcare, agriculture,
manufacturing, oils and gas, among others.
The banker noted that
as a result of this pandemic, revenues accruing to businesses to run their
business and pay their bank loans are impacted negatively, thus the CBN expect
difficulty of businesses to service their loans. Emefiele explained that it was
against these worrisome developments that the apex bank decided that “all
intervention loans currently under moratorium are granted additional moratorium
of one year on all principal repayments effective March, 2020. Accordingly,
participating financial institutions are hereby directed to provide
amortization schedule to reflect the new order. “Interest rates on all
applicable CBN facilities have been hereby reduced by 9 percent to 5 percent
per annum for one year effective March 1, 2020.” “The CBN hereby establishes a
facility through NIRSAL Microfinance Bank to the sum of N50bn for households,
MSMEs that have been particularly hit by Covid-19 including but not limited to
hoteliers, airlines services providers, health care merchants, and so on”, the
governor added. He also announced an unspecified credit support for health care
industry, saying that in order “to meet potential demand for health care
services and products, the CBN hereby opens for intervention facilities loans
to pharmaceutical companies intending to expand or establish their own drugs
manufacturing plants in Nigeria as well as to hospital and health care
practitioners who intend to build or expand to world class standards.”
According to him, the CBN also plans to increase intervention support to
agricultural and manufacturing sectors. Emefiele also announced a regulatory
forbearance to big businesses by granting “banks leave to consider temporary
restructuring of the tenure and loan terms for businesses and households most affected
by the outbreak, particularly the oil and gas, agric and manufacturing.” He
said that the apex bank was optimistic that these measures will help mitigate
the impact of Covid-19 on the Nigerian economy. Commenting on the newly
announced measures, President of Manufacturers Association of Nigeria (MAN),
Engr. Mansur Ahmed, said he was optimistic that the measures would impact on
the economy deeply. According to the industrialist, “whilst our key focus
should be at preventing the spread of the virus, our major trading partners
have been heavily impacted and that has direct implication for how well we will
fare.” Ahmed said since the apex bank has taken the lead, it is necessary for
the government to ensure that other regulatory authorities step up to complement
in areas where they can ease the burden for drivers of economic activities.
“Look at the port for instance; there is a lot of delay and inconveniencies
that can be ameliorated”, he said. He said the leadership of MAN will move to
ensure that the operators understand the conditions under which these
incentives are provided. The National Coordinator, Association of Women in
Micro, Small and Medium Enterprises (AWIMSME), Mrs. Nancy Nathaniel, said
the impact of the 5% downward review of interest rate on intervention funds by
the apex bank “will encourage women operators in the MSME space across economic
sectors to adhere to best business and good agronomy practices because they
will have more money to standardise and certify their products and services.
“This reduction of interest will stimulate more interest among women business
owners to key into the various initiatives, including the Agriculture, Small
And Medium Enterprise Scheme (AGSMEIS), Anchor Borrowers Scheme, etc.”, the
AWISMEIS leader said. President National Association of Small and Medium
Enterprises (NASME) Prince Degun Agboade, said: “The good news for even
for manufacturers and then for those who produce foods. They will appreciate
it. The funds were meant for manufacturers in the first instance but many of us
did not get it, now that the good news has come, I hope they will make it more
available to MSMEs. I think it is a welcome development. We at NASME welcome
the measures and we hope that CBN will see to it that it’s done and it will not
only be pronouncements but getting the funds to the end users. In a similar
tone, the Director General for Global Centre Human Empowerment and
Entrepreneurship Development, Mrs. Rose Gyar said she was excited because it’s
going to impact on SMEs positively. She said: “The interest rate which was
reduced will now be plowed back into their capital and it will help sustain
their businesses. It will support their competiveness because more funds more
money to carry out businesses.”
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