Monday, May 23

How To Apply For CBN’s N5bn ‘100 For 100 Loan’

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The Central Bank of Nigeria (CBN) launched the 100 for 100 Policy on Production and Productivity (PPP) targeted at private companies who have a project to fund and can apply for as much as N5 billion under the scheme.

Once the apex bank can determine that the private company can have a substantial impact on the economy through “Performance Indicators (KPIs)”, the company would be selected. The CBN would screen and finance eligible private sector companies in 100 days, and rollover every 100 days.

The initiative, 100 for 100 PPP, is a financial instrument designed to create the flow of finance and investments to enterprises with the potential to catalyze sustainable economic growth trajectories, accelerate structural transformation, promote diversification, and improve productivity.

How it works

The Central Bank of Nigeria is prepared to select 100 private sector companies with projects that have the potential to significantly increase domestic production and productivity, reduce imports, increase non-oil exports, and overall improvements in the foreign exchange generating capacity of the Nigerian economy.

The initiative, which would be bank-led, will be rolled over every 100 days (that is, quarterly) with a new set of companies selected for financing under the initiative.

The initiative shall be funded from the CBN’s Real Sector Support Facility-Differentiated Cash Reserve Requirement (RSSF-DCRR) window or any other funding window as may be determined by the CBN.

The loan amount shall be a maximum of N5bn per obligor and any amount above N5bn shall require the special approval of CBN’s Management.

Monthly interests on the facility shall be amortised and transferred quarterly with principal repayments to the CBN. The interest rate under the intervention shall not be more than 5.0 percent p.a. (all-inclusive) up to 28th February 2022, thereafter, interest on the facility shall revert to 9 percent p.a. (all-inclusive) effective from 1st March 2022.

How CBN would monitor the progress of the company

The apex bank would set up comprehensive, regular monitoring of specific benchmarks and key performance indicators (KPIs) for selected companies including: Rate of Growth in production output, increase in capacity utilization, increase in export volume, increase in export value, decrease in industrial raw material import volume, decrease in industrial raw material import value and increase in the number of jobs generated.

How to apply

Interested private-sector enterprises must submit applications to their PFIs together with the necessary documentation, which includes, among other things; Financial statements, certified true copies of company registration documents evidencing the incorporation of the Company with the Corporate Affairs Commission (CAC).

Other documentation includes; Three (3) years of audited financials, including the most recent management account of the company. Evidence of the company’s, promoters’, and directors’ creditworthiness and at least two (2) credit reports of the company and the directors.

The applicant is expected to provide a business plan of the underlying project for which the facility is to be applied and well as a detailed status report on the project’s capacity utilisation, production output, productivity/efficiency level, employment level, export capacity, and value creation.

The apex bank will also examine increased capacity utilisation, production output, productivity/efficiency level, employment level, export capability, and value creation after funding should be projected to represent the project’s post-financing economic benefits.

Applicants are expected to notify the CBN of submitted applications via a dedicated online portal (https://100for100ppp.ng)

How your application would be processed and approved

Once the lending bank receives your applications, due diligence will be conducted based on business and creditworthiness. Afterwards, the lending bank would forward the applications of their eligible private sector companies to the CBN for approval by the appropriate PFI’s Credit Committee.

The CBN would screen and finance eligible private sector companies in 100 days, and rollover every 100 days.

The CBN shall release the approved sum to the PFI for onward disbursement to the selected private sector companies and successful beneficiaries would be published in National dailies for Nigerians to verify and confirm with details of facility granted, operating sector, manufacturing activities financed, and PFI.

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