Pursuant to the objectives outlined under the fourth pillar and as part of its developmental function, the CBN has introduced new initiatives to enhance the flow of credit to the productive sectors of the economy.
The new incentives include:
5.1 N200 Billion Restructuring/Refinancing to the Manufacturing Sector/SMEs
In a bid to unlock the credit market, the CBN provided N500 billion out of which N200 billion is for re-financing/re-structuring of banks‘ existing loan portfolios to the manufacturing sector and SMEs.
The investment is in the form of debenture stock to be issued by the Bank of Industry (BOI). The main objective of the fund is to fast-track the development of the manufacturing sector by improving access to credit by manufacturers as well as improving the financial position of the DMBs. The category of facilities under the fund include long-term loans for acquisition of plant and machinery, refinancing of existing loans, resuscitation of ailing industries, working capital and refinancing of existing lease.
The loan amount for a single obligor is the maximum of N1 billion in respect of re-financing/restructuring with an interest rate of 7.0 per cent payable on quarterly basis. All the 24 banks in the country as well as Development Finance Institutions (DFIs) excluding the Bank of Industry (BOI) are to participate in the fund. Thus far, the sum of N130.2 billion has been disbursed from the fund with N117.7 as term loan while the balance of N12.5 billion was disbursed as working capital.
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