CBN offers manufacturers single-digit loans

Central Bank of Nigeria (CBN) is offering a single digit interest rate loan facility to manufacturers and other members of the real sector.

In a statement revealing the guidelines for the real sector support facility (RSSF), the bank said the loan is towards increasing credit to priority sectors.

“The Central Bank of Nigeria, as part of efforts to stimulate output growth, enhance value addition and engender productivity in the economy established the Real Sector Support Facility (RSSF),” CBN said.

“The Facility will be channelled towards increasing credit to priority sectors of the economy with sufficient employment capabilities, high growth potentials, increase accretion to foreign reserves, expand the industrial base and consequently diversify the economy.

“The RSSF will be used to support start-ups and expansion financing needs of enterprises. Improve access to finance by the agricultural value chain, manufacturing, mining, solid minerals activities and other strategic sub-sectors of the Nigerian economy.”

Speaking on interest rates, which has been a bottleneck for start-ups in Nigeria, CBN said it was giving the loan to deposit money banks (DMBs), for them to issue the same at nine percent or less.

“The Facility shall be administered at an all-in interest rate/charge of 9 percent per annum payable on quarterly basis,” while “the CBN shall release the fund to DMBs at 1% interest rate”.

The DMBs would however be responsible for monitoring the real sector projects gulping the loan facility.

DMBs shall “appraise and approve requests under the Facility based on normal business consideration and due diligence”.

“Forward such approved requests to CBN for verification and final approval. Consider the grant of credit ONLY to real sector projects at an interest rate of 9% per annum all inclusive.

“Monitor the Projects during the loan period, render periodic returns as may be specified by the CBN from time to time and comply with the guidelines of the facility.