The Central Bank of Nigeria (CBN) recently published a list of 28 companies that benefited from N23.2 billion of the first cycle of 100 to 100 in Production and Productivity (PPP).
It should be noted that the largest number of applications is that the maximum credit limit under the initiative of the main bank is N5 billion. However, more than N5 billion applications may be considered subject to CBN approval.
The scheme, which was launched on November 1, 2021, will select 100 private sector companies with projects that have the potential to significantly increase local productivity and foreign exchange earning capacity of Nigeria.
The initiative, which will be led by banks, will be implemented every 100 days (quarterly) and a new group of companies will be selected to receive financial assistance under the initiative.
Nigerian entrepreneurs who want to raise funds for their existing businesses or start-ups can apply for loans if their business matches CBN’s goal of stimulating the economy.
Covered Activities
The project includes manufacturing, agribusiness and agro-processing, extractive, petrochemical and renewable industries, healthcare and pharmaceuticals, logistics services and trade-related infrastructure, and other activities as determined by CBN.
Existing project initiatives will be focal activities, although CBN may also explore new projects.
Funding
The initiative will be funded by the CBN Real Sector Support Fund Differential Cash Reserve Requirement window (RSFF-DCRR) or any other window designated by the bank.
Limit and type of loan
Long-term loans for the purchase of equipment and machinery, as well as loans for working capital, will be part of the 100-100 PPP intervention. The maximum credit limit of the initiative is N5 billion. Over N5 billion applications require CBN approval.
The term of the loan must be a maximum of 10 years, depending on the complexity of the project, and pay before December 31, 2031. The working capital system will have a term of one year in which you will have the option to renew up to three. A two-year moratorium will apply to one-year loans.
Interest rate
The interest rate will not exceed 5% per year (inclusive) until February 28, 2022. Subsequently, the interest on the line will return to 9% per year (inclusive) as of March 1, 2022.
Congenital needs
It applies to 100 PPP initiatives for 100 congenitally acceptable under the CBN Real Sector Support Fund.
Read: 100 to 100 Policy: See a list of 28 companies that have received the CBN loan of 23.2 billion naira.
Repayment of Loan
Monthly interest on the facility will be amortized and transferred to CBN quarterly with predetermined payments.
How to apply
Interested companies must submit their applications to the participating financial instruments (commercial banks) along with the required documents, including:
- 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 utilization, 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 roll over 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.