Access Bank Plc, Nigeria’s biggest bank by assets, has commenced the disbursement of N50 billion worth of interest-free loans to micro, small and medium-size enterprises (MSMEs) that were destroyed or looted by hoodlums in the violent aftermath of the protest against police brutality in the country.
Access Bank says it has approved about 60 applications and about half have received the loans already.
“We received 2000 applications for the interest fee credit from those whose businesses were looted or damaged during EndSARS protest, we have approved 60 applications and we have disbursed half of that,” two of the bank’s staff familiar with the project told BusinessDay.
Some beneficiaries confirmed to BusinessDay that they had received funds from the bank.
The development brings much-needed relief to businesses that were on the receiving end of violent protests last month.
The protests, which started as a peaceful movement of young Nigerians seeking the reform of the police force, was soon hijacked by hoodlums who attacked the protesters and then engaged in looting and mass destruction of private and public properties.
In what lifted the lid on the social discontent in Nigeria, the hoodlums looted and destroyed private properties running into billions of naira.
The destruction added to the pain of Nigerian businesses that were already reeling from the effect of the COVID-19 pandemic.
Access Bank announced a few days after the massive destruction and looting that it would be supporting affected Nigerian businesses with N50 billion interest-free loans and grants.
According to the company, the loan would be targeted at customers of the financial institution across its MSME business, commercial banking customers as well as corporate banking customers affected by the looting and arson in some parts of the country.
The company further noted that the idea is to support working capital as well as access finance.
“It has a maximum tenor of 24 months for the access finance and 12 months for the working capital. The structure is flexible and it is to align with the customers’ cash flow.
“The term facility would have a moratorium period of six months and then we would structure the repayment following the customers’ own cash flow cycle. Both are interest-free,” the company said.
“We hope that during the window about 500 customers would have been supported,” the bank’s staff said.
“What you get depends on the capacity of your business and ability to pay back,” they said.
Africa’s biggest economy contracted by 6.1 percent in the second quarter of 2020, the worst in over a decade, as lower oil prices and the COVID-19 pandemic- which has ravaged developed and developing economies- hammered the economy.
Economists predict that the economy is a quarter away from a recession, the second in five years.
The International Monetary Fund (IMF) has projected that the country will contract by -5.4 percent in 2020 while World Bank projected a contraction of -3.3 percent.
SMEs are the engine room for economic growth all over the world and Nigeria is not exempted.
In Nigeria, SMEs contribute 48 percent of national GDP, account for 96 percent of businesses and 84 percent of employment, according to the National Bureau of Statistics (NBS).
Access Bank says it is motivated by the desire to help businesses and it also aligns with their corporate social responsibility mandate.
The lender recorded a profit of N61 billion in the first half of the year, a 1.29 percent decline from N61.8 billion recorded the same period last year.
Gross earnings jumped 22 percent to N396 billion in the first half of the year from N324 billion recorded the first half of 2019.
The bank’s share price was down 0.57 percent at the close of trading in Lagos on November 19.
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