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CBN waives guarantor requirement for SMEs, households credit

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An SME working with his sewing machine. Source: Stearsng.com

The Central Bank of Nigeria (CBN), has waived the requirement for the provision of guarantors by Small and Medium Enterprises (SMEs) and households that applied for its N50billion COVID-19 targeted credit facility. 

The CBN Director, Corporate Communications Department, Isaac Okorafor, in a statement, Monday, also assured all successful household and SME applicants that have submitted their account details for the facility, to be credited within 48 hours.  

Therefore, he urged all successful applicants under the Bank’s COVID-19 Targeted Credit Facility (TCF), whose accounts have not been credited, to visit the website of NIRSAL Microfinance Bank and input their account details.

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He, however, urged any successful applicant that does not receive a credit alert within 48 hours to call a designated mobile number of the CBN for resolution.  

According to him, the bank will address the concerns of those who had fulfilled all requirements for the loan but were yet to have their accounts credited, particularly as other persons had begun to receive credit alerts. 

Okorafor reiterated that the palliative being disbursed were loans, and should not be taken as grants, and therefore urged eligible households and small businesses to take advantage of the palliative to revive their businesses and contribute to steering Nigeria away from recession.

Recall that the CBN on March 23, unveiled guidelines for the implementation of the N50billion n Targeted Credit Facility, as a stimulus package to support households and micro, small and medium enterprises affected by the COVID-19 pandemic.

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Based on the CBN guidelines, the eligible beneficiaries of the fund are households with verifiable evidence of livelihood adversely impacted by COVID-19 and existing enterprises with verifiable evidence of activities adversely affected as a result of the COVID-19 pandemic.

The CBN had recently reduced interest rates on its facilities through participating Other Financial Institutions (OFIs) from nine to five percent per annum on households, businesses and regulated institutions, in effort to mitigate the impact of the coronavirus on the sector.

Similarly, in a circular signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, and issued on May 27, explained that CBN intervention facilities obtained through participating OFIs – Microfinance Banks (MFBs), Primary Mortgage Banks, and Institutions, among others – will be given a further one-year moratorium on all principal repayments, also effective March 1, 2020.

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According to the circular, OFIs were equally granted leave to consider temporary and time-limited restructuring of the tenor and loan terms for households and businesses affected by COVID-19, subject to the recently issued guidelines for restructuring affected credit facilities in the OFI sub-sector.

Okorafor said the Management approval for the restructuring of credit facilities in the Other Financial Institutions (OFI) sub-sector was in line with the Bank’s desire to alleviate momentary strain on households, businesses and regulated institutions triggered by the lockdown due to COVID-19.

He added that the CBN would also continue to monitor developments and implement appropriate measures to safeguard financial stability and support stakeholders impacted by the COVID-19 pandemic.

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