Beneficiaries of CBN interventions count gains

One of the beneficiaries of the intervention funds of the Central Bank of Nigeria (CBN), Chidomere Nkechi, fish farmer, is now reaping the benefits of the fund as she has expanded her business by 100 percent from rearing 6,000 fish in 2020 to 12,000 this year.

Nkechi accessed the fund under the Covid-19 Targeted Credit Facility (TCF), which the CBN established in 2020 as stimulus package to support households and micro, small and medium enterprises (MSMEs) affected by the COVID-19 pandemic, which are disbursed through the NIRSAL Microfinance Bank (NMFB).

Already, N343.21 billion has been disbursed to 726,198 beneficiaries, comprising 602,730 households and 123,468 MSMEs.

“The covid-19 affected my business greatly, a lot of things went down, the business was so slow but I thank God for the CBN’s TCF loan which I applied in 2020 and to God be the glory I got the money the same 2020. The loan has impacted my business positively. It has helped me to expand my business. Before I had about 6,000 fishes but now I can boast of 12,000 and above,” Nkechi said.

Another beneficiary of TCF, Salamatu Suleiman, poultry farmer, said, “the Covid-19 has affected our business in so many ways. Due to the restricted movement, customers could not come to buy product. We had to store the products for some time pending when we get buyers. The fund has helped my household in so many ways. It has created a room for the expansion of the business. It has led to generation of another source of income to me and my household”.

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Ganiat Jimoh, farmer, is another beneficiary under the TCF, programme, she said, “I got to know about the TCF fund through social media. My friend sent me a link. I received the loan on June 2020. Due to the lockdown, our farmers were not able to go to the farm as they would and we were not able to carry out our assessment functions. Raw materials were very expensive and our capital was not enough to do business. When we accessed the loan we were able to add it to our capital, which helped us to increase our production.”

Temi Blessing, baby product seller, also benefited from the CBN’s intervention fund under the TCF programme. She said, “I benefited from the TCF fund. The money has helped me to improve on my business. Things are better now and my business has taken a new shape.”

Given the resounding success of this program and its positive impact on domestic consumption, the seed capital for the intervention was increased to N400.00 billion, so as to accommodate many more beneficiaries and boost consumer expenditure which should positively impact output growth.

The efforts of the CBN under the leadership of Godwin Emefiele, its governor, have been targeted at promoting price and monetary stability, exchange rate stability, financial system stability as well as efforts to spur growth through its development finance interventions.

During his maiden address on June 5, 2014, Emefiele said his vision would be to ensure that the Nigeria’s Central Bank is more people focused, as its policies and programs would be geared towards supporting job creation, reducing the high level of Treasury Bill rates, improving access to credit for Micro, Small and Medium Enterprises (MSMEs), deepening its intervention program in the Agricultural Sector, building a robust payment system infrastructure that will help drive inclusion, in addition to key macroeconomic concerns such as exchange rate stability, financial system stability and maintaining a strong external reserve.

The CBN has also disbursed N134.57 billion to 38,140 projects in agriculture, cottage industry, manufacturing, services, amongst others under its Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS).

Chibuzo Nwosu, taxi driver, is a beneficiary of AGSMEIS (artisan and vocation). He said, “I was a taxi driver before I got the TCF. After I received the money, my life changed. I have been able to use it to establish block moulding business. I now pay my children school fees even before schools resume.”

Sadique Mohammed Jamiu, AGSMEIS beneficiary under Fashion and Textile, said, “From the loan I got, I bought a finisher machine and another one too. Before, I used to wait for customers to bring clothes for me to saw but now I am able to get some fabrics and start my own ready to wear.”

AGSMEIS, which is an initiative of the Bankers’ Committee was formally approved at its 331st meeting in 2017.

The initiative is to support the Federal Government’s efforts and policy measures for the promotion of agricultural business and small and medium enterprises (SMEs) as vehicle for sustainable economic development and employment generation.

The mode of operation of the initiative released by the CBN indicates that the scheme requires all banks in Nigeria to set aside 5 percent of their profit after tax annually for equity investment in Agri-business and SMEs.

Meanwhile, the activities to benefit from the scheme include agricultural investments which such as production, storage, processing, logistics and marketing. While SMEs in the real and services sectors which are backward integrated into manufacturing, agriculture, mining and modular refineries would benefit from the scheme. Also included are technological endeavours such as local initiatives in information and communication technology (ICT) and any other activities as may be determined by the Bankers; Committee from time to time.

The initiative is targeted at Start-ups and expansion of established companies or reviving of ailing companies is expected to further enhance job creation and agri-business towards sustainable economy.

Given the impact of Covid-19 pandemic on key economic variables, the CBN took a number of measures to mitigate the long-term effects on the growth prospects of the economy. First, policy measures were introduced to restore stability in the economy by supporting households that have been severely affected by the pandemic. Also, targeted interventions were introduced to support critical sectors, such as agriculture, manufacturing, energy, and health. Cumulatively, the apex Bank’s intervention efforts represented about 3.5 per cent of the Nigeria’s Gross Domestic Product (GDP).

Some of the policy measures include a cumulative reduction of the monetary policy rate from 13.5 to 11.5 percent between May and September 2021 in order to spur lending to the economy and support current recovery of output growth; reduction of the interest rate on CBN intervention loans from 9 to 5 percent; a 1-year extension of the moratorium on principal repayments for CBN intervention facilities; regulatory forbearance was granted to banks to restructure loans given to sectors that were severely affected by the pandemic; strengthening of the Loan to Deposit ratio (LDR) policy, which has resulted in a significant rise in loans provided by financial institutions to banking customers.

As part of efforts at addressing youth unemployment challenge in Nigeria, the banking sector regulator released N3.00 billion to 7,057 youth entrepreneurs, comprising 4,411 individuals and 2,646 SMEs under the Nigeria Youth Investment Fund (NYIF).

It disbursed the sum of N803.80 billion to about 3.8 million smallholder farmers cultivating 4.8 million hectares of 21 agricultural commodities financed across the 36 states and the FCT under the Anchor Borrowers’ Programme (ABP).

The Bank’s Commercial Agriculture Credit Scheme (CACS) has targeted large-scale agricultural projects to create jobs, drive import substitution and enhance domestic value addition. The Scheme has released N712.19 billion to 657 large-scale agricultural projects.

The CBN introduced the Healthcare Sector Intervention facility (HSIF) to support pharmaceutical companies and healthcare practitioners intending to expand and strengthen their capacity. So far, the intervention has financed 110 healthcare projects, of which 23 were pharmaceuticals, 77 hospitals and six other healthcare service projects, valued at N103.02 billion. It has also supported the acquisition and installation of over 45 Magnetic Resonance Imaging (MRIs) machines by hospitals; 36 Computed Tomography (CT) scanners; and expansion of production lines in various pharmaceutical companies across the country.

There is the establishment of the Healthcare Sector Research and Development Intervention (Grant) Scheme (HSRDIS), which has supported five research projects in the academia for research and development of test devices and kits for Lassa Fever and Covid-19.

Other policy measures also include mobilization of key stakeholders in the Nigerian economy through the Coalition against COVID-19 (CACOVID), which led to the provision of over N28.0 billion in relief materials to affected households, and the set-up of 39 isolation centers across the country.

It also established the real sector facility to support the resilience of the real sector and boost local manufacturing and production across critical sectors. 190 real sector projects have been financed under the intervention, including key infrastructural development projects in power generation, iron ore/steel production, rail system, road construction, aviation, and gas production, valued at over N1.00 trillion.

In line with the Bank’s developmental mandate to stimulate finance to infrastructure development in Nigeria, the CBN has equally developed and introduced low-interest and long-term finance interventions in tandem with the gestation periods of infrastructure projects. The design of the interventions was hinged on the need to develop enabling infrastructure in critical sectors to drive economic growth and development.

To fast track the development of infrastructure in the power and aviation sectors, the Power and Airlines Intervention Facility (PAIF) disbursed N312.77 billion to 73 projects to stimulate investment in the sectors, improve power generation, support retention of sustainable jobs and enhance the living standard of the citizens through improved access to electricity.