Home Business CBN released maximum credit facility to agric, manufacturing
CBN released maximum credit facility to agric, manufacturing

CBN released maximum credit facility to agric, manufacturing


The Central Bank of Nigeria has released the guidelines for accessing the Real Sector Support Facility aimed at channelling funds to the manufacturing and agricultural sector.

It said in the statement that the maximum facility would be N10bn per project and facilities were to be administered at an interest rate of nine per cent per annum.

The release of the guidelines, according to the apex bank, is part of measures aimed at increasing the flow of credit to the real sector of the economy.

This is expected to consolidate and sustain the nation’s economic recovery.

The CBN said in the statement issued on Thursday night by its Acting Director of Corporate Communications, Mr Isaac Okorafor, that the Deposit Money Banks would henceforth be incentivised to direct affordable, long-term bank credit to the manufacturing, agriculture.

Apart from the manufacturing and agriculture sectors, other sectors considered by the CBN as employment and growth stimulating would also benefit from the long-term credit to be given at single digit interest rate.

He disclosed that Corporate/Triple-A rated companies would be encouraged to issue long-term Corporate Bonds under the guidelines.

He added that a Corporate Bond Funding Programme had been put in place, adding that the bond programme, involved investment by the CBN and the general public in Corporate Bonds issued by companies.

This, he noted, was subject to the intensified transparency requirements for participating companies.

He also explained in the statement that the requirements for the bond programme would include publishing through printing of an Information Memorandum which would spell out the details of the projects for which the funds would be required.

It would also provide the terms and conditions that would show that these are long-term ones that would generate employment and stimulate growth.

The statement read in part, “The bank had put in place a programme under the Differentiated Cash Reserves Requirement Regime whereby the DMBs interested in providing Credit Financing to greenfield (new) and brownfield (expansion) projects in the real sector (agriculture and manufacturing) could request for the release of funds from their Cash Reserves Requirements to finance the projects; subject to the DMBs providing verifiable evidence that the funds shall be directed at the approved projects by the CBN.

“The tenor for the differentiated CRR would be a minimum of seven years with a two-year moratorium.

“For the Corporate Bonds programme, the tenor and the moratorium would be specified in the prospectus by the issuing corporate.”

The apex bank called for a total compliance with the guidelines by stakeholders, adding that it was determined to encourage projects that would further enhance Nigeria’s import substitution strategies.







Source: Punch


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