The Central Bank of Nigeria (CBN) has under it’s new financial instrument, tagged, 100 for 100 Policy on Production and Productivity (100 for 100 PPP) capped all loans to be accessed by obligors at N5 billion.
According to the new financial policy, any amount above the limit shall require the special approval of the apex bank’s management.
In the implementation guidelines signed by the Director, Development Finance Department, Yila Yusuf and posted on the bank’s website, interest rate under the intervention shall be at not more than five per cent per annum all inclusive, up to February 28, 2022, after which interest on the facility shall revert to nine per cent effective March 1, 2022.
CBN Governor, Godwin Emefiele, in October, unveiled the new financial instrument to boost support for select private sector companies in the country.
He said the policy seeks to advertise, screen, scrutinise and financially support 100 targeted private sector companies in 100 days, effective November 1, 2021, and rolling over every 100 days with new set of 100 companies.
What the policy hopes to achieve, the apex bank said, is to stimulate the flow of credit to the real sector of the economy in order to reverse the nation’s over-reliance on import and that the initiative would be operated in the first instance for a period not exceeding December 31, 2031, depending on the complexity of the project.
It further explained that the initiative shall be funded from the CBN’s Real Sector Support Facility – Differentiated Cash Reserve Requirement (RSSF-DCRR) window or any other funding window as may be determined by the CBN and implemented in line with the provisions of the guidelines for the implementation of the underlying intervention (RSSF¬DCRR) including the sanction regime.
The CBN pointed out that the 100 for 100 PPP was also designed to stimulate investments in Nigeria’s manufacturing sector with the core objective of boosting production and productivity, necessary to transform and catalyse the productive base of the economy, with the overarching goal to reverse the nation’s over reliance on import.
