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6 Top Secured CBN Loan Funds For Entrepreneurs

The CBN loan is the amount of financial support given to individual or institutions with a condition the loan grants will be repaid on a later date with or without interest. Money is a necessity for business owners and entrepreneurs personal needs and business ideas to be materialised.

A secured CBN loan is a loan in which the loan borrowers will pledge their assets which comprise movable assets, properties, and so on. These assets are always worth more than the amount of the loan, and the Central Bank of Nigeria can claim the assets if the loan borrower does not pay back the loan according to the loan agreed terms and conditions.

These CBN loan terms and conditions for accessing the secured loans are general and specific requirements that normally form important parts of the loan agreements. Whatever the type of loans an individual is willing to apply for, the terns and conditions are very essential.

Lists of CBN Loans you can apply for

Secured CBN Loan Funds

Micro, Small and Medium Enterprises Development Fund (MSMEDF)

Prospective borrowers for this loan should approach Participating Financial Institutions (PFIs) of their choice and apply for the loan grant

Eligible Enterprise for this loan

Micro entrepreneurs (i. e. borrowers seeking loans of less than N500,000) are to approach any of the 4 institutions listed below

  • Microfinance Banks NGO/Microfinance Institutions
  • Financial Cooperatives
  • Finance Companies

Small and Medium Enterprises (SMEs) (i.e. prospective borrowers seeking between N500, 000 and N50million) are to approach any of these institutions:

  • Deposit Money Banks
  • Bank of Industry (BOI)
  • Bank of Agriculture)

Who are the Participating Financial Institutions?

The Participating Financial Institutions under this CBN loan funding are as follows:

Micro borrowers (N500,000 to N5,000,000) would approach:

  • Microfinance Banks
  • NGO-Microfinance Institutions
  • Finance Companies
  • Financial Cooperatives

Small and Medium Enterprise borrowers (N5,000,000 to N50,000,000) would approach:

Deposit Money Banks and Development Finance Institutions (Bank of Agric and Bank of Industry)

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What are the activities that can be financed under the CBN loan funding?

  • Agricultural value chain activities,
  • Manufacturing & Cottage Industries,
  • Artisans,
  • Services,
  • Trade and general commerce,
  • Renewable energy or energy efficient products and technologies, and
  • Any other income generating projects as may be prescribed by the CBN.

Prospective borrowers shall provide the requisite documents including collateral for SME loans. Participating Financial Institutions will appraise loan applications, approve and forward loan requests of borrowers to the CBN for the release of funds.

The CBN loans shall be granted at an interest rate of 9.0% per annum (all charges inclusive) irrespective of the type of eligible activity financed. Loan borrowers are expected to payback all loans as and when due inclusive of any accrued interest to the Participating Financial Institutions.

The Creative Industry Financing Initiative

Throught the Creative Industry Financing Initiative CBN loan funding, entrepreneurs can get up to N500 million to finance your creative business with the Creative Industry Financing Initiative, supported by GTBank and funded by the Central Bank of Nigeria. This facility is available to entrepreneurs in fashion, music, movie production, and information technology.

The Creative Industry Financing Initiative (CIFI) is a loan scheme developed in collaboration with the Central Bank of Nigeria (CBN) to provide access to long-term and low-interest financing for entrepreneurs in the creative industry, including Fashion, Music, Movies, and Information Technology.

Who can apply for the Creative Industry Financing Initiative CBN loan funding

  • Fashion (Designers)
  • Music (Music Production & Distribution)
  • Movie (Movie Production & Distribution)
  • Information Technology (Information Technology & Student Software Development Loan).

Who Can Apply for the loan grant

Entrepreneurs in the following sectors of the creative industry:

  • Fashion (Designers)
  • Music (Music Production & Distribution)
  • Movie (Movie Production & Distribution)
  • Information Technology (Information Technology & Student Software Development Loan)

You can apply online to fill and submit the form below to begin the application process.

CBN Agricultural Credit Guarantee Scheme Fund (ACGSF)

The Agricultural Credit Guarantee Scheme Fund was established by Decree No. 20 of 1977, and started operations in April, 1978. Its original share capital and paid-up capital were N100 million and N85.6 million, respectively.

The Federal Government holds 60% and the Central Bank of Nigeria, 40% of the shares. The capital base of the Scheme was increased to N3 billion in March 2001. The loan Fund guarantees credit facilities extended to farmers by banks up to 75% of the amount in default net of any security realized.

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The Fund is managed by the Central Bank of Nigeria, which handles the day-to-day operations of the Scheme. The Guidelines stipulate the eligible enterprises for which guarantees could be issued under the Scheme.

Application forms under the Scheme are obtainable from various branches of participating banks throughout the country. The various forms normally completed in the operation of the Scheme by banks can be downloaded from the list below:

CBN Agricultural Credit Support Scheme (ACSS)

This CBN loan is an initiative of the Federal Government and the Central Bank of Nigeria with the active support and participation of the Bankers� Committee. The Scheme has a prescribed fund of N50.0billion.

The Agricultural Credit Support Scheme (ACSS) was introduced to enable farmers to exploit the untapped potentials of Nigeria�s agricultural sector, reduce inflation, lower the cost of agricultural production (i.e. food items), generate surplus for export, increase Nigeria�s foreign earnings as well as diversify its revenue base.

At national level, the scheme operates through a Central Implementation Committee (CIC) while at the Federal Capital Territory (FCT) and State levels, the Scheme operates through State Implementation Committees (SICs) instituted to ensure that the objectives of the scheme is realized without hindrance.

To access loans under ACSS, applicants (practicing farmers and agro-allied entrepreneurs with means) are encouraged to approach their banks for loan through the respective state chapters of farmers associations and State Implementation Committees.

However, large scale farmers are allowed under the scheme to apply directly to the banks in accordance with the guidelines. Agricultural Credit Support Scheme funds are disbursed to farmers and agro-allied entrepreneurs at a single-digit interest rate of 8.0%.

At the commencement of the project support, banks will grant loans to qualified applicants at a 14.0% interest rate. Applicants who pay back their facilities on the schedule are to enjoy a rebate of 6.0%, thus reducing the effective rate of interest to be paid by farmers to 8.0%.

CBN Loan for Healthcare Sectors

This CBN loan is a support for the Healthcare sector is an on-lending intervention scheme for the Healthcare sector developed as part of the pro-active measures to cushion the economic impact of the coronavirus (COVID-19) pandemic.

The initiative was developed to provide funding to indigenous pharmaceutical companies and other organizations in the healthcare value chain to enable them to increase capacity to meet the increasing demand for healthcare arising from the coronavirus pandemic.

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Loan Limit

  • For working Capital: 20% of their average turnover for the last 3 years up to a maximum of N500 million per obligor. Where the business is not up to 3 years in operation, 20% of the previous year’s turnover would be considered.
  • For Term Loan: Maximum loan amount of N2 billion

Loan Tenor

  • Working capital shall be for a maximum period of one (1) year, with provision for rollover not more than three (3) years.
  • Term loan shall have a maximum tenor of not more than 10 years with a maximum of a one-year moratorium on repayment.
  • For construction projects, the tenor shall be determined by the completion date.

Eligible Participants

  • Healthcare product manufacturer
  • Healthcare service providers/ medical facilities
  • Pharmaceutical/medical products distribution and logics services
  • Other human healthcare service providers

Loan Benefits

  • This initiative provides long-term, low-cost finance to facilitate the development of the Nigerian healthcare sector.
  • It will improve access to affordable credit for indigenous pharmaceutical companies for expansion and encourage compliance with the WHO Good Manufacturing Practice.
  • The scheme will contribute to the overall development of the Nigerian Healthcare system.

You can get in touch with the Participating Financial Institution for details on how you can be supported with your business by calling the following phone numbers +234 1- 2712005-7, +234 1-2802500, 07003000000.

Conclusion

The CBN loan is an important source of financial relief for business owners and entrepreneurs. As a business owner, the CBN loan can be an alternative source of income that can assist you in meeting your personal needs and achieving a business expansion.

All you just need is to understand the terms and conditions of the CBN loans on offer to assist you in choosing the best offer suitable for your financial needs. It is important for you know that all loans taken must be repaid in accordance with the attached terms and conditions of each participating financial institutions.

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