100 for 100 Policy: How to apply for CBN’s loan: The Central Bank of Nigeria (CBN) has revealed a list of 28 enterprises that benefited from the first cycle of the 100 for 100 Policy on Production and Productivity, totaling N23.2 billion (PPP).
What the majority of applications should bear in mind is that the apex bank has set a maximum credit limit of N5 billion for the project. However, applications above N5 billion may be approved with CBN permission.
This scheme, which began on November 1, 2021, will pick 100 private sector firms with projects that have the potential to considerably increase Nigeria’s domestic productivity and foreign exchange earning capability.
The effort, which will be led by banks, will be renewed every 100 days (quarterly), at which point a new set of enterprises will be selected for financing under the initiative.
Nigerian entrepreneurs seeking money for their existing enterprises or start-ups may apply for the loan if their venture coincides with the Central Bank of Nigeria’s goal of stimulating the economy.
The initiative encompasses manufacturing, agribusiness and agroprocessing, extractive industries, petrochemicals and renewable energy, healthcare and pharmaceuticals, logistics services and trade-related infrastructure, as well as other activities specified by the CBN.
The initiatives will focus on existing projects, but the CBN may also pursue new ones.
The program would be funded through the Central Bank of Nigeria’s (CBN) Real Sector Support Facility-Differential Cash Reserve Requirement (RSFF-DCRR) window or through any other window determined by the Bank.
Loan amount and kind
The 100 for 100 PPP intervention will include long-term loans for equipment and machinery procurement, as well as working capital loans. The highest loan amount available under the initiative is N5 billion. Applications costing more than N5 billion must be approved by the CBN.
Term loans must be for a maximum of ten years, depending on the intricacy of the project, and must be repaid by December 31, 2031. The working capital arrangement will be for a period of one year with the option to renew for up to three years. Term loans will be subject to a two-year moratorium.
Rate of interest
Up to 28th February 2022, the interest rate shall not exceed 5% per annum (all-inclusive). Following that, interest on the facility will revert to 9% per annum (all-inclusive) on March 1, 2022.
The CBN’s Real Sector Support Facility accepts collateral for the 100 for 100 PPP initiative.
Monthly interest on the facility shall be amortized and transmitted to the CBN quarterly in conjunction with principle repayments.
Interested businesses must submit applications to participating financial institutions (commercial banks) along with the required documentation, which includes the following:
- Evidence of incorporation of a business with the Corporate Affairs Commission (CAC)
- Three years of financial statements that have been audited.
- Creditworthiness of the company, including its promoters and directors.
- At least two credit reports on the business and its directors.
- The business strategy for the underlying project that requires funding.
- Detailed status report on capacity utilization, production output, productivity/efficiency, employment, and value creation for the project.
- Detailed report on the project’s economic advantage following financing.
- Applicants shall notify CBN of submitted applications using a dedicated internet portal https://100for100ppp.ng/ for application tracking and monitoring.
How are the monies obtained?
- Financial institutions participating in the program (PFIs) will receive applications and conduct due diligence on them based on business and credit concerns.
- The lending bank shall forward qualifying private sector enterprises to CBN upon approval by PFI’s credit committee.
- The CBN will evaluate and finance eligible applications within 100 days and will continue to do so on a 100-day rolling basis.
- The Bank will conduct an internal evaluation of all applications to verify they meet the specified criteria.
- The CBN then distributes the approved funds to PFIs for re-distribution to chosen private sector entities.
- Beneficiaries would be listed in National Dailies to allow the public to verify the facts of supported activities.