The Central Bank of Nigeria (CBN) has set the maximum loan limit in its recently introduced initiative at N5b.
The apex bank disclosed this in its guidelines for the implementation of the initiative which was released on Saturday.
The guideline read, “Quarterly, starting from November 1, 2021, the initiative shall select 100 private sector companies with projects that have 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 shall be bank-led, will be rolled over every 100 days (that is, quarterly) with a new set of companies selected for the initiative.
“The initiative would be implemented in collaboration with relevant stakeholders, with a focus on micro and macroeconomics impacts, in terms of contribution to the GDP and exports, sustainable jobs created, local content development, production output, capacity utilisation and integration into the global value chain.
“Loan amount shall be a maximum of N5b per obligor. Any amount above N5b shall require the special approval of CBN’s management, ” it said.
CBN further added that interest rate under the intervention would be at not more than five per cent per annum, all inclusive, up to February 28, 2022, adding that interest on the facility would revert to nine per cent per annum, all inclusive, effective from March 1, 2022.
Recall that the initiative, called, ‘The 100 for 100 PPP– Policy on Production and Productivity was introduced in October, 2021.
The broad objective of the initiative is to reverse the nation’s over-reliance on imports, by creating an ecosystem that targets and supports the right projects with the potential to transform and catalyse the productive base of the economy.
On the specific objective, the CBN said it was designed to catalyse import substitution of targeted commodities, increase local production and productivity, increase non-oil exports, and improve foreign exchange-earning capacity of the economy.
It said the main areas to be covered under the initiative would be existing businesses and projects with the potential to transform and catalyse the productive base of the economy and also new projects with the same initiative, subject to the CBN’s management approval.
The areas to be focused on include manufacturing, agriculture and agro-processing, extractive industries, petrochemicals and renewable energy, healthcare and pharmaceuticals.