Farmers and manufacturers can now heave a sigh of relief as the Central Bank of Nigeria (CBN) has come up with a policy to enable them borrow long term loans of N10 billion at a reduced interest rate of nine percent.
The apex bank unveiled the new credit policy known as for Accessing Real Sector Support Facility (RSSF) through CRR and Corporate Bonds on Thursday.
According to the CBN acting Director, Corporate Communications, Mr. Isaac Okorafor, who made the disclosure in a statement on Thursday, the new policy is aimed to increase the flow of credit to the real sector; agriculture and manufacturing.
[penci_blockquote style=”style-2″ align=”none” author=””]According to him, under the programme, banks interested in providing Credit Financing to new and expansion projects in the real sector could request for the release of funds from their Cash Reserve Ratio (CRR) to finance the projects.[/penci_blockquote]
He said also that the maximum facility would be N10 billion per project and facilities were to be administered at an Interest rate of 9 per cent per annum.
Okorafor said that Deposit Money Banks (DMBs) would henceforth be encouraged to direct affordable, long-term bank credit to the manufacturing, agriculture, as well as other sectors considered by the Bank as employment and growth stimulating.
He stated that Corporate, Triple-A rated companies would be encouraged to issue long-term Corporate Bonds (CBs) noting that a CBs Funding Programme had already been put in place to enable the CBN and the general public invest in the CBs.
The spokesman further revealed that the Bank had put in place another programme under the Differentiated Cash Reserves Requirement (DCRR) Regime.
According to him, under the programme, banks interested in providing Credit Financing to new and expansion projects in the real sector could request for the release of funds from their Cash Reserve Ratio (CRR) to finance the projects.
Okorafor further clarified that the tenor for the Differentiated CRR would be a minimum of seven years with a two-year moratorium.
For the Corporate Bonds programme, he stated that the tenor and the moratorium would be specified in the prospectus by the issuing corporate.
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Okorafor therefore advocated for a total compliance with the guidelines by stakeholders.
He also reiterated CBN’s determination towards the encouragement of projects that would further enhance Nigeria’s import substitution strategies.
The guidelines followed the recommendation of the CBN Monetary Policy Committee (MPC). At its 119th meeting held between 23 and 24 July, the MPC emphasised the need to increase the flow of credit to the real sector of the economy, to consolidate economic recovery.