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How To Access CBN Covid-19 Relief Fund For Businesses

Covid-19 Relief Fund

It’s no longer news that the Covid-19 pandemic is a global threat to the world and a great threat to businesses. During this pandemic, many businesses have closed down, some had to lay off their employees while other businesses are still struggling to survive. As a result, the Central Bank of Nigeria came up with the CBN Covid-19 Relief fund for businesses.

See Also: How To Get Loan From Development Bank Of Nigeria And Grow Your Business

In April 2020, Central Bank of Nigeria announced that Private Corporate bodies and individuals wishing to make voluntary donations towards the fight against the COVID-19 dreaded virus can make such contributions to the Central Bank of Nigeria private sector. As of 28th April, CBN announced that private sectors have contributed up to N27bn. These funds are being given to households and businesses in the form of loan.

Start Your Business in 30 Days Even If You Don't Have An Idea
Start Your Business in 30 Days Even If You Don’t Have An Idea

Do you run a business in Nigeria? Was your business affected by the pandemic? If your answer is yes, then this article is for you.

See Also: 11 Ways To Get Funding And Grow Your Business In Nigeria

CBN Covid-19 Relief Fund For SMEs

Since the outbreak of the virus, Federal Government of Nigeria through Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, Budget, and National Planning have announced the different monetary and fiscal measures to help mitigate the impact of COVID-19 on households, Nigerian businesses, and the economy generally. CBN introduced a N50 billion Targeted Credit Facility (TCF) as a way to support micro, small, and medium enterprises (MSMEs) that are affected by the coronavirus pandemic.

See Also: Small Business Funding – 9 Ways To Fund Your Small Business In Nigeria

Objectives of TCF

The broad objective of TCF include:

  • Cushioning the adverse effects of COVID-19 on households and MSMEs
  • Supporting households and MSMEs whose economic activities have been significantly disrupted by the COVID-19 pandemic
  • Stimulate credit to MSMEs to expand their productive capacity through equipment upgrade, and research and development.

See Also: 12 Best Crowdfunding Sites To Fund Your Business Or Product In Nigeria

Who Is Eligible For TCF?

According to Central Bank of Nigeria (CBN), below are the list of participants that can apply for Targetted Credit Facility (TCF).

i. Households with verifiable evidence of livelihood adversely impacted by COVID-19.

ii. Existing enterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic.

iii. Enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 pandemic.

See Also: 10 Business Funding Opportunities For Aspiring Entrepreneurs In Nigeria To Grow Their Businesses

Activities covered by the Scheme

i. Agricultural value chain activities
ii. Hospitality (accomodation and food services)
iii. Health (pharmaceuticals and medical supplies)
iv. Airline service providers
v. Manufacturing/value addition
vi. Trading
vii. Any other income generating activities as may be prescribed by the CBN

Go from idea to starting your business in 30 days
Go from idea to starting your business in 30 days

See Also: 9 Business Funding Opportunities For Women Owned Businesses In Nigeria

Loan Limits

  • SMEs: The loan amount is determined based on the activity, cashflow and industry/segment size of the beneficiary, subject to a maximum of N25million for SMEs; and
  • Households: Can assess a maximum of N3 million
  • Working capital shall be a maximum of 25% of the average of the previous 3 years’ annual turnover. Where the enterprise is not up to 3 years in operation, 25% of the previous year’s turnover will suffice.

See Also: Top 10 Mobile Loan Apps In Nigeria Where Employees And Entrepreneurs Can Access Loans

Interest Rate

The interest rate is 5% per annum (all inclusive) up to 28th February, 2021 and thereafter, the interest on the facility will revert to 9% per annum (all inclusive) as from 1st March, 2021

Loan Tenor

  • Working capital shall be for a maximum period of one year, with no option for rollover.
  • The minimum tenor of the loan is not more than 3 years with, at least, one-year moratorium.

See Also: Biography of Godwin Emefiele, the Governor Of The Central Bank Of Nigeria (CBN)

Collateral Requirements

The collateral to be pledged by beneficiaries under TCF is as acceptable by NIRSAL MFB, but may include any one or more of the following:

i. Movable assets duly registered on the National Collateral Registry (NCR)
ii. Simple deposit of title documents, in perfectible state
iii. Deed of Debenture (for stocks), in perfectible state
iv. Irrevocable domiciliation of proceeds
v. Two (2) acceptable Guarantor
vi. Personal Guarantee of the promoter of the business
vii. Life Insurance of the Key-Man, with NMFB noted as the First Loss Payee
viii. Comprehensive insurance over the asset

See Also: Top Legal Documents Every Entrepreneur And Start-Up Should Have

How To Apply For CBN Relief Fund As Household/MSME

  1. Submit applications directly to NIRSAL Microfinance Bank (NMFB)
  2. The application must, among others contain BVN number, business registration (where applicable) and business plan with clear evidence of the opportunity or adverse impact as a result of COVID-19 pandemic
  3. NMFB will appraise and conduct due diligence on applications
  4. Upon satisfactory appraisal of application, NMFB shall forward the applications to the CBN for final approval
  5. CBN will then review the application and give final approval for disbursement to NMFB

See Also: List Of Commercial Banks In Nigeria – Offerings And Overview.

How To Apply For CBN Covid-19 Relief Fund As A Corporate Entity

  1. A corporate entity will submit application to NMFB with clear evidence of the opportunity or adverse impact as a result of COVID-19 pandemic
  2. NMFB shall appraise and conduct due diligence applications
  3. Upon satisfactory appraisal of application, NMFB shall forward the applications to the CBN for final approval
  4. CBN reviews applications and gives final approval for disbursement to NMFB

See Also: 14 Sources Of Business Funding Opportunities For Entrepreneurs In Nigeria

Responsibilities Of CBN

i. Provide the seed fund for the scheme
ii. Release funds to NIRSAL MFB for disbursement to successful applicants
iii. Review the guidelines of the Facility as may be necessary
iv. Receive and process periodic returns from NIRSAL MFB
v. Monitor and evaluate implementation of the Scheme by NIRSAL MFB

See Also: How To Process Your NAFDAC And Get A NAFDAC Registration Number For Your Product

Responsibilities of NIRSAL MFB

i. Validate the status and BVN of the applicants
ii. Process and disburse funds to approved beneficiaries
iii. Maintain records of all beneficiaries and disbursements
iv. Forward periodic returns on the prescribed format on the Scheme to CBN
v. Comply with the guidelines; and
vi. Carry out any other duties as the CBN may prescribe from time to time

See Also: Benefits of registering your business with CAC

Further inquiries can be addressed to:

Director,
Development Finance Department
Central Bank of Nigeria,
Abuja

Note: The exit date of this intervention (CBN Relieve Fund) is 31st December, 2024

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3 thoughts on “How To Access CBN Covid-19 Relief Fund For Businesses”

    1. Hello Bankole,

      Please visit the CBN website to get more information on how to apply for the loan.

      Thank you.

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