CBN Begins Fund Disbursement to SMEs, Households Affected By Coronavirus Outbreak

Central Bank of Nigeria (CBN) has begun to release funds from the N50 billion Targeted Credit Facility to Small and Medium Enterprises (SMEs) as well as households whose livelihood had been negatively affected by the Coronavirus outbreak.

Over 80,000 applications were received from SMEs and self-employed individuals, but the NIRSAL Microfinance Bank will only disburse the first batch of undisclosed funds to 3,256 individuals and businesses.

The fund is being awarded in form of a loan, which the beneficiaries are mandated to pay back as stipulated.

The Managing Director of NIRSAL MFB, Abubakar Kure, who flagged off the disbursement, warned the beneficiaries to utilise the loan as agreed upon as the bank would ensure repayment of the loan.

Beneficiaries of the funds

The N50 billion Targeted Credit Facility is a stimulus package from the Micro, Small and Medium Enterprises Development Fund. It was created for the SMEs and individuals who have proof that their businesses and households were adversely impacted by the pandemic which restricted movement and business activities.

The stimulus package will increase access to cash flow as high as N25 million depending on the SMEs initial capital base and industry size, while households with an average of 25% minimum working capital in the last three years could request to the tune of N3 million.

The CBN is targeting businesses in the agricultural value chain market; hospitality (accommodation and food services); health (pharmaceuticals and medical supplies), airline service providers, manufacturing, trading and any other business activities considered worthy by the apex bank.

Speaking on the essence of the facility, Kure said, “This is not a grant; it is a credit facility intended to cushion the impact of COVID-19 on businesses particularly the  SMEs." Kure said while emphasising on the importance of SMEs in the growth of the economy, “The SMEs are the engine of any economy because they provide employment and taxes to government.

“We urge people to apply. You don’t need to know anybody before you apply and once you qualify, you will be given the loan.” Kure said.

According to Kure, the loan will enable the small businesses return to productive activities as Nigeria gradually reopens its economy following President Muhammadu Buhari's decision to ease the lockdown.