Access to loans by small and medium enterprises will increase with the release of additional N150 billion for businesses affected by the COVID-19 pandemic.
The Targeted Credit Facility (TCF) is also accessed by households also affected by the pandemic.
The loan disbursements were based on the activity, cash flow, and industry size of the beneficiaries. Each eligible small business can receive a maximum of N25 million while qualified households can access a maximum of N3 million each.
The expansion of the credit line would enable the regulator increase the reach and impact of the facility to households and small and medium businesses in dire need of funds.
CBN Governor, Godwin Emefiele, said the TCF is already being disbursed through the NIRSAL Microfinance Bank.
Besides, N149.21 billion has been disbursed to 316,869 beneficiaries adding that given the resounding success of this programme and its positive impact on output growth, the apex bank has decided to double it fund to N300 billion.
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The TCF was designed to cushion the adverse effects of COVID-19 on households and small businesses. The scheme was to support households and small businesses whose economic activities have been significantly disrupted by the COVID-19 pandemic to expand their productive capacity through equipment upgrade, research and development.
“The increase is to to accommodate many more beneficiaries and boost consumer expenditure which should positively impact output growth. “Given the impact on COVID-19 on key economic variables earlier mentioned, the fiscal and monetary authorities took unprecedented measures to prevent any long-term damage to the growth prospects of our economy,” he said.
The apex bank boss said the first objective was to restore stability to the economy by providing assistance to households and businesses that had been severely affected by the pandemic. In addition, the regulator sought to stimulate economy activity through targeted interventions in critical sectors such as agriculture, manufacturing, electricity and construction.
He added that there is one-year extension of the moratorium on principal repayments for CBN intervention facilities and regulatory forbearance was granted to banks to restructure loans given to sectors that were severely affected by the pandemic.
He said the CBN has also strengthened the Loan to Deposit ratio policy, which has resulted in a significant rise in loans provided by financial institutions to banking customers.
“Total gross credit rose by over 21 percent over the past year, from N15.5 trillion to N19.54 trillion. The apex bank, he added has also disbursed Agri- Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) (N92.90 billion to 24,702 beneficiaries), Anchor Borrowers Program (ABP) by the sum of N164.91 billion to 954,279 beneficiaries,” he said.
According to him, mobilization of key stakeholders in the Nigerian economy through the Coalition against COVID- 19 (CACOVID), which led to the provision of over N28 billion in relief materials to affected households, and the set-up of 39 isolation centers across the country while there was also creation of a N100 billion intervention fund in loans to healthcare practitioners intending to expand and strengthen the capacity of our healthcare institutions; so far 60 health care related projects are being funded to the tune of over N60 billion as a result of the intervention.
“There is also creation of a research fund, which is designed to support the development of vaccines in Nigeria and establishment of a N1 trillion facility in loans to boost local manufacturing and production across critical sectors; 53 major manufacturing projects, 21 agriculture related projects and 13 service projects are being funded to the tune of over N360 billion from this facility. The impact of these measures along with the removal of restrictions on movement and resumption of international travel, led to improvement in key indicators of the economy, as several economic activities returned to positive growth,” he said.
The apex bank said it has also extended over N738 billion credit to manufacturers for manufacturing related activities to keep their operations running amidst the pandemic.
He disclosed that with these interventions, a sectoral assessment of economic activities in the third quarter indicates that the economy witnessed positive growth in key sectors such as Inform, health, construction, finance and insurance and public administration.
