The coronavirus pandemic has affected every single aspect of life in Nigeria and around the world, but various businesses are going through an especially rough time. CBN’s initiative allows every eligible business in Nigeria to take a loan out of a 50 billion naira fund. Here is how to do it.
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1. Who can take a loan?
In an effort to help small business who have been badly affected by the COVID-19 pandemic, the CBN has introduced an initiative called Targeted Credit Facility, or TCF. TCF is designed to assist not only businesses, but also households whose livelihood has been damaged by the effect of COVID-19. The overall Targeted Credit Facility fund is ₦50 billion, which means that every small business that qualifies for the loan can get substantial help to stay afloat.
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Besides households, there are two other categories of potential borrowers who can access the TCF coronavirus relief fund:
- Micro enterprises, who can provide verifiable proof of their business activities being negatively affected by the coronavirus pandemic,
- Small and medium enterprises, who can provide sound business plans targeted at growing their businesses due to the pandemic.
2. How much can you take?
The ₦50 billion fund will be divided among all applicants who are eligible for the loan. For households, the maximum size of the loan is fixed and they will be able to access up to ₦3 million, although each case will be reviewed and the reviewers will determine how badly the household was affected by the pandemic.
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With micro enterprises and small and medium business, the situation is more complex than that. There is no minimum amount of money you can borrow from CBN, as the size of the loan will be different for each applicant. The reviewers will take into account the size of the business, the type and state of the industry in which the business operates, its cashflow, and activity of the business in the months and years preceding the COVID-19 pandemic. The maximum amount of money you can take is ₦25 million, but it’s easy to guess that micro enterprises will likely not be able to access that much and will have to be satisfied with smaller loans.
3. How to apply for the loan?
The procedure of applying for the coronavirus business loan from CBN is not at all complicated and requires just three steps:
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- Due to the coronavirus threat, all applications for the TCF loan are taken online, so you can use your desktop computer or mobile device to complete the request. Fill in the application form on the NMFB website. You will need to specify your personal and financial details, your BVN, and how exactly COVID-19 has affected your business.
- The NMFB will review your application, and if you qualify for the loan, it will transfer your application to CBN so that the CBN can issue its final approval for the loan.
- After your application for the loan is approved by the CBN, your request will be processed and the funds will be issued using the financial details you provided while applying for the package. You will have exactly 1 year to repay the loan with a 5% interest rate until February 28, 2021 and a 9% interest rate starting from March 1, 2021.
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