The Central Bank of Nigeria (CBN) has scrapped the submission of business plan as a compulsory requirement to apply for its N50bn loan facility set up to ameliorate impact of coronavirus on businesses and households.
Abubakar Abdullahi Kure, Managing Director, NIRSAL Microfinance Bank (NMFB) announced the development in Abuja following recent concerns that the bank was charging application fees on the loan.
The CBN, last month set up the N50bn facility to be disbursed at single-digit interest rate through the NIRSAL Microfinance Bank for households and small- and medium-sized enterprises (SMEs) that would be particularly hard hit by Covid-19, including hoteliers, airline service providers, health care merchants, among others.
Already 80,000 applications have been received and according to Kure, NIRSAL MFB will in coming week commence disbursement to qualified, genuine applicants.
He said of the total applications received, 40,000 came from households while 30,000 came from Micro, Small and Medium scale enterprises.
He encouraged people that have genuine requests to apply but warned those who think the money is just a grant to “stay away.”
Explaining the new decision at a news conference, Kure said they initially observed that loan applicants were submitting highly substandard business plans and that to ensure high standard and efficient processing, NMFB engaged a third-party service provider to enable an optional, automated business plan at a highly discounted fee.
This, he said was to avoid applicants being charged excessively by other consultants and also to assist applicants during the stay at home period and make application process easy, a situation which generated so much push-back.
But he said in order “to stem further controversy, the management of NMFB had resolved that the business plan is no longer a mandatory requirement and the third party provision of a business plan is no longer compulsory.”
He said the reason for scrapping this requirement is to simplify the process, ensure speedy disbursements so that the intervention does not lose its essence through additional costs.
Restating CBN’s earlier clarification that no charges or fees are being collected from applicants, Kure rather stressed that though business plan has been scrapped, including it will make the loan processing a lot easier.
He assured that the NMFB would adhere to the guidelines as laid down by the CBN and called for applications from credible businesses and households to mitigate the effects of Covid-19, but would consequently continue to accept the business plans people submit independently.
He said what they will now rely on in appraising loan requests is global standing instruction – a platform that allows the NMFB access a beneficiary’s cash flow and deposits in his bank accounts.
Onyinye Nwachukwu, Abuja
