Recently the Central Bank of Nigeria (CBN) released the list of 28 companies that were beneficiaries of N23.2 billion from the first cycle of the 100 for 100 Policy on Production and Productivity (PPP), here’s how to be a beneficiary of subsequent cycles.
Gatekeepers News reports that most applicants should bear in mind that although the maximum loan limit under the initiative is N5 billion, applications above N5 billion may be considered subject to the approval of the apex bank.
On November 1, 2021, the scheme to select 100 private sector companies with projects that have the potential to significantly boost local productivity and the foreign exchange generating capacity of Nigeria commenced.
The 100 for 100 PPP which will be bank-led, will be rolled over every 100 days (quarterly) and a new set of companies will be selected for financing under the scheme.
Nigerian entrepreneurs whose existing businesses or start-ups can apply for the loan and whose business aligns with the CBN’s objective to stimulate the economy can now apply.
Businesses That can Apply
Agribusiness and agro-processing, manufacturing, extractive industries, healthcare and pharmaceuticals, petro-chemicals and renewables logistics services, and trade-related infrastructure, among other activities prescribed by the apex bank are all included in the project.
Although the CBN may explore new projects as well, existing projects will be the focal activities under the initiatives.
Funding
The scheme will be funded through the CBN’s Real Sector Support Facility-Differential Cash Reserve Requirement (RSFF-DCRR) window or any other window that the Bank determines.
Loan Limit & Type
Although the scheme’s maximum lending ceiling is N5 billion, the apex bank’s approval is required for applications worth more than N5 billion. However, long-term loans for equipment and machinery procurement, as well as working capital loans, will be part of the 100 for 100 PPP intervention.
Term loans must have a maximum tenure of 10 years, depending on the project’s complexity. However, it must be paid off by December 31, 2031. The working capital arrangement will have a one-year term with the option to roll it over for up to three years. A two-year moratorium will apply to term loans.
Interest rate
The interest rate shall not exceed 5% per annum (all-inclusive) up to February 28, 2022. Afterwards, interest on the facility shall revert to 9% per annum (all-inclusive) effective from March 1, 2022.
Collateral requirement
Collateral acceptable under the CBN’s Real Sector Support Facility applies to the 100 for 100 PPP initiative.
Payback
The monthly interest on the facility shall be amortised and transferred quarterly with principal repayments to the apex bank.
How to apply
Interested companies are to submit their applications to participating financial instruments (commercial banks) with the following requisite documents:
- Evidence of company incorporation with Corporate Affairs Commission (CAC)
- Three years of audited financial reports.
- Evidence of the company’s creditworthiness, including its promoters and directors.
- A minimum of two credit reports of the company and directors.
- Business plan of the underlying project in need of financing.
- Detailed status report on project’s capacity utilisation, production output, productivity/efficiency level, employment level, value creation.
- Detailed report on the post-financing economic benefit of the project.
- Applicants shall notify CBN of submitted applications via a dedicated online portal https://100for100ppp.ng/ for tracking and monitoring application status.
How do you get the funds?
- Participating financial institutions (PFIs) shall receive applications and conduct due diligence on applications based on business and credit considerations.
- Upon approval by PFI’s credit committee, the lending bank shall forward eligible private sector companies to CBN.
- The CBN will screen and finance eligible applicants in 100 days and rollover every 100 days.
- The Bank will conduct an internal review of applications to ensure compliance with stipulated requirements.
- Then, the CBN releases the approved sum to PFIs for onward disbursement to selected private sector companies.
- Beneficiaries would be published in National Dailies for the public to confirm details of activities financed.
