The Central Bank of Nigeria (CBN) recently launched the 100 percent policy on production and productivity, aimed at private companies wishing to apply for a loan to finance a project.
Last month, CBN Governor Godwin Emefiele said the policy would subject potential recipients to a vetting process before they were deemed eligible for the loan. Selected businesses can apply for loans of up to N5 billion under the 100 percent policy.
The CBN will use key performance indicators (KPIs) to assess whether or not the company can have a direct impact on the country’s economy. It was also confirmed that the policy would involve 100 companies in 100 days, before moving on to the next 100 days. The interest rate on loans under the policy will not exceed 5.0% per annum until February 28.and 2022 when it returns to 9% per year
Key performance indicators for CBN to consider include: production growth rate, increase in capacity utilization, increase in export volume, increase in export value, decrease in the volume of imports of industrial raw materials, decrease in the value of imports of industrial raw materials, and increase in the number of jobs generated.
Interested companies must submit applications to their participating financial institutions (PFIs, i.e. banks that are partners of the Central Bank in the execution of the policy), together with the necessary documents. Some of the documents required for the application include financial statements, certified copies of company registration with the Corporate Affairs Commission (CAC), three years of audited finances, evidence of company solvency, at at least two credit reports of the company and the directors.
Other necessary documents include a business plan of the project for which the loan is acquired and a detailed progress report on the project’s capacity utilization, production, level of efficiency, level of employment, export capacity and value creation. Companies must also provide projections of increases in capacity utilization, production, level of productivity, level of employment, export capacity and value creation in order to represent the economic benefits of the project after funding. Applicants will notify the CBN of submitted applications via a dedicated online portal on the official website at 100 for 100 dpi.
Once the lending bank receives the application, they will perform business and credit based due diligence. After that, the bank will forward applications from eligible private enterprises to the CBN for approval by the appropriate private finance initiative credit committee.
The CBN will then screen and accept eligible businesses for 100 days, before moving on to the next 100 days. After that, the CBN will remit the approved amount to the participating financial institution for disbursement to the selected private companies. Successful recipients will be publicized nationwide for Nigerians to check details of the facility granted, sector of operation, manufacturing activities that have been funded and participating financial institution.