The Central Bank of Nigeria (CBN) is seen as Nigeria’s topmost bank. It controls the monetary policies of the country.Central Bank of Nigeria (CBN) loans are aimed at both small and larger businesses. They lend funds to enhance the growth of businesses that needs urgent intervention.
Roles/Duties of the CBN
- gives ways for people to pay for things safely i.e. issuing bank notes and supervising payment services (e.g. MasterCard, Verve, and Visa)
- Making sure all of Nigeria’s banks are well-run i.e. regulation
- Keeping prices low and stable i.e. managing inflation
- Keeping the whole Nigerian financial system stable
- Conducting research that allows it to make better-informed decisions
- Gathering and analyzing data from commercial banks, microfinance banks, credit unions, insurers, and mortgage companies
- Producing resources that ensure people are kept up to date, and that they understand how the economy works
- One of the CBN’s key roles is to boost small and medium-sized enterprises (SMEs), by helping them get greater access to credit or funding. this is achieved through several development finance operations
The Central Bank of Nigeria offers various lending products and intervention funds. They include:
Anchor Borrower’s Programme (ABP)
The Anchor Borrower Programme gives loans to farmers without an interest rate. They are also given various farm inputs e.g. seeds and fertilizer. Loans are repaid with either cash or the equivalent value in harvested produce. Up to N2 billion can be borrowed, at 9% interest. The maximum loan tenor is 24 months. Businesses that use agricultural products as raw materials are also eligible for this loan. In other words, businesses that are involved in farming activities.
Commercial Agriculture Credit Scheme (CACS)
Argo-businesses can become beneficiaries of the Central Bank of Nigeria’s, N200 billion Commercial Agriculture Credit Scheme.
This facility was established by both the CBN and the Federal Ministry of Agriculture. It seeks to develop the agricultural sector in Nigeria, create jobs, and enhance food security, through granting loans to eligible agro-allied businesses.
This scheme features an interest rate of 9%. Up to N2 billion Naira can be borrowed, with loan tenors that can reach up to 60 months. You may be qualified for the CACS fund If your business is involved in activities such as the cultivation of crops, fisheries, and rearing of livestock.
Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS)
AGSMEIS is a Federal Government of Nigeria intervention scheme, managed by the CBN. The loan specifically targets micro, small, and medium-sized enterprises (MSMEs), with the aim of creating more jobs and providing sustainable economic growth. Interest rates are low (5%) and loan tenors are up to 7 years. Businesses are also entitled to a moratorium period of 18 months on the principal, and 6 months on interest.
Businesses that are eligible to all MSMEs engaged in productive activities related to:
- Real sector (manufacturing, mining, petrochemicals, etc.)
- Service sector (ICT, creative industry, etc.)
- Educational sector
- Agricultural sector
- Other businesses as deemed fit by the CBN
Creative Industry Financing Initiative
The Creative Industry Financing Initiative enables businesses to access up to 500 million Naira. The facility is available to entrepreneurs or SMEs involved in:
- Fashion
- Information communication technology
- Music distribution and production
- Software engineering students
- Movie distribution and production
The maximum interest rate applied is 9%, with a maximum repayment period of 10 years.
With this initiative, the CBN seeks to motivate the creative industry, where businesses have often struggled to meet the strict collateral requirements of traditional commercial loans.
Credit Support Scheme for the Healthcare Sector
The Central Bank of Nigeria has taken measures to extend loans of up to N100 billion, to support intervention efforts based in the healthcare sector.
Through this scheme, it is hoped that indigenous pharmaceutical companies and related healthcare businesses across the value chain, are able to expand their effort to deliver goods and services to Nigerians.
Eligible participants under this scheme include:
- Healthcare product manufacturers (pharmaceutical drugs and medical equipment)
- Healthcare service providers and medical facilities (clinics, diagnostic centers, fitness centers, hospitals, rehabilitation centers, etc.)
- Other human healthcare service providers, as may be determined by the CBN
- Pharmaceutical and medical products (distribution and logistics services)
For the purposes of working capital, the loan limit is 500 million Naira — with a maximum loan tenor of 1 year. For term loans, the lending limit is 2 billion Naira with a maximum loan tenor of 10 years. For both options, interest rates are set at 9% per annum.
Maize Aggregation Scheme (MAS)
The Maize Aggregation Scheme is a working capital scheme. It helps Agro-businesses purchase home-grown maize. Businesses involved with the following activities are eligible for the MAS fund:
- Confectionery
- Poultry Farmers
- Feed Millers
- Silo Operators
- Warehouse Operators
The maximum financing tenor is 12 months. You can borrow up to N2 billion at 9% interest per annum.
Paddy Aggregation Scheme (PAS)
The Paddy Aggregation Scheme is a short-term bridging or working capital facility. It is designed to assist rice millers in purchasing paddy, for processing their produce throughout the year. Up to 2 billion Naira can be borrowed at an interest rate of 9% per annum. Repayments are to be made within 12 months.
The goals of the Real Sector Support Facility are to increase output, generate employment, diversify the revenue base, increase foreign exchange and provide inputs for the industrial sector on a sustainable basis for the economy. N300 billion has been set aside scheme. The RSSF may be used to support startups, as well as the expansion plans of more established businesses.
Businesses involved in the following sectors are:
- Agro business
- Mining
- Manufacturing
- Solid minerals
Simple trading activities are not covered by this scheme.
Credit can come in the form of either a term loan or working capital finance. Loans are suitable for asset acquisition or expansion, while working capital is to be used for purchasing raw materials.
Micro, Small, Medium Enterprises Development Fund (MSMEDF)
The CBN N220 billion Micro, Small, Medium business Development Fund, is a single-digit interest rate (9%) loan facility. It can be given through Participating Financial Institutions (PFIs) i.e. banks.
Loans must be repaid within 3 years and you can access up to 50 million Naira. 60% of the fund is available to only women, while 10% is provided for startups.
Businesses in the following sectors are eligible for the scheme:
- Agricultural value chain
- Trade & commerce
- Manufacturing
- Artisans
- Healthcare
- Renewable energy
- Education
- Services
- Other economic activities as decided by the CBN
10 percent of the fund is provided for development objectives, through grants and capacity building. The remaining 90% is the commercial component. The fund as a whole seeks to enhance MSMEs access to credit, increase productivity and create jobs.
Non-Oil Export Stimulation Facility (NESF)
The Non-Oil Export Stimulation Facility is made to help diversify the revenue base on the Nigerian Economy, by supporting the development of the non-oil export sector. The fund aims to redress the decline in export financing
The scheme allows for the financing of anything that can help Nigerian export businesses. Accordingly, as well as supporting the export value chain, the scheme allows companies to import the plants and machinery required to manufacture and produce goods for export.
Export-oriented businesses, with verifiable export off-take contracts, are eligible for the scheme. There is a lending amount of 5 billion Naira. Loans have a maximum tenor of 10 years. There is an interest rate of 9% applies.
Loans have a tenor of up to 10 years. Working capital facilities have a tenor of 1 year. Up to N10 billion can be borrowed, with the minimum level of borrowing set at N500 million.it comes with an interest rate of 9% per annum. To any facility offered.
See also-Government Loans in Nigeria | Federal Student Financing
Qualifying for a Central Bank of Nigeria loan
Any business involved in productive activities may qualify for a loan, under one of several intervention schemes of the Central Bank of Nigeria.
The CBN does not usually fund individuals. Accordingly, you will need to have a registered business or company with the Corporate Affairs Commission (CAC).
Also, as the CBN does not offer a direct loan, you will need to be a customer of one of the eligible financial institutions i.e. PFIs. Eligible PFIs include all microfinance banks, non-governmental organizations-microfinance Institutions (NGO-MFIs), financial cooperatives, finance companies, development finance institutions (Bank of Agriculture and Bank of Industry), and deposit money banks.
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