By Tosin Olatokunbo
Small Business owners in the country need not worry over processing fee as they apply for the N50 billion special intervention fund, set up by the Central Bank of Nigeria, CBN, to cushion the impact on the COVID-19 pandemic, the apex bank has said.
The fund was set up by CBN to assist SMEs, households, and enterprises who have verifiable evidence that their livelihood have been adversely affected by the deadly virus.
The clarification however, came on the crest of rumours on social media that owners of small-scale businesses and individuals are required to pay certain amount to process their loan applications.
The Director, Corporate Communications, CBN, Isaac Okorafor, in a statement on Monday, warned members of the public, particularly households and owners of small-scale businesses, to disregard any message requiring them to pay any fee.
Okorafor said,“The attention of the CBN has again been drawn to false reports in the social media circles that loan seekers and owners of small-scale businesses who apply for loans provided to cushion the effects of COVID-19 are required to pay a certain amount as an application processing fee.
For the avoidance of doubt, there are clearly spelt out procedures for accessing the N50 billion Targeted Credit Facility, TCF stimulus package to support households and micro, small and medium enterprises, MSMEs affected by the COVID-19 pandemic, which is disbursed through the NIRSAL Microfinance Bank (NMFB).
Members of the public, particularly households and owners of small-scale businesses, are therefore advised to disregard any message requiring them to pay any amount to process their applications.”
He said “Any observed irregularities should be reported to the Consumer Protection Department of the CBN.”
According to the guidelines, MSMEs can access up to N25 million while households can access up to N3 million out of the CBN’s N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), and those eligible for the credit facility include, agriculture value chain, hospitality, health, airline service providers, manufacturing/value addition, trading as well as any other income-generating activities as may be prescribed by the CBN.
According to the guidelines.“Working capital shall be a maximum of 25 per cent of the average of the previous three years’ annual turnover; where the enterprise is not up to three years in operation, 25 per cent of the previous year’s turnover will suffice.
Interest rate under the intervention shall be five per cent per annum all-inclusive up to 28th February 2021 and thereafter, the interest on the facility shall revert to nine per cent as from 1st March 2021,” it had stated
Eligible applicants, the guidelines further said, must provide collateral such as “Moveable asset(s) duly registered on the National Collateral Registry (NCR), a simple deposit of title documents, in the perfectible state, Deed of Debenture (for stocks), in perfectible state, irrevocable domiciliation of proceeds, two acceptable guarantors, personal guarantee of the promoter of the business, life insurance of the borrower, with NMFB, noted as the first loss payee and comprehensive insurance over the asset.”
