The Central Bank of Nigeria (CBN) has introduced a new initiative called for the 100 for 100 Policy on Production and Productivity (PPP) with the objective of stimulating domestic production and employment for Nigerians, while reducing the country’s dependence on imports.
Starting from November 1, 2021, the initiative will select 100 private sector companies with projects that have the potential to significantly boost local productivity and the foreign exchange generating capacity of Nigeria. The initiative, which will be bank-led, will be rolled over every 100 days (on quarterly basis) and new set of companies will be selected for financing under the initiative.
Activities Covered
The initiative covers activities across manufacturing, agriculture & agro-processing, extractive industries, petro-chemicals and renewables, healthcare and pharmaceutical, logistics services and trade-related infrastructure and other activities as may be prescribed by the CBN. Focal activities under the initiatives shall be existing projects while new projects may be considered by the CBN.
Funding
The initiative will be funded from CBN’s Real Sector Support Facility- Differentiated Cash Reserve Requirement (RSFF-DCRR) window or any other window as may be determined by the Bank.
Loan Limit & Type
Intervention under the 100 for 100 PPP will comprise long-term loan for procurement of equipment and machinery and working capital loan. The maximum loan limit under the initiative is N5 billion. Application above N5billion is subject to the approval of CBN.
Term loans shall have a maximum tenor of 10 years depending on the complexity of the project, not exceeding December 31, 2031. Working capital facility shall have a tenor of one year with provision for roll-over for a maximum of 3 years. Term loans will have a moratorium of two years.
Interest Rate
Interest rate shall not exceed 5% per annum (all inclusive) up to 28th February 2022. Afterwards, interest on the facility shall revert to 9% per annum (all inclusive) effective from March 1, 2022.
Collateral Requirement
Collateral acceptable under the CBN’s Real Sector Support Facility applies to the 100 for 100 PPP initiative.
Repayment
Monthly interest on the facility shall be amortized and transferred quarterly with principal repayments to the CBN.
Application Modalities
Interested companies are to submit their applications to participating financial instruments (commercial banks) with requisite documentation, which include:
- Evidence of company incorporation with Corporate Affairs Commission (CAC)
- Three years of audited financial reports.
- Evidence of company’s creditworthiness, including its promoters and directors.
- A minimum of two credit reports of the company and directors.
- Business plan of the underlying project in need of financing.
- Detailed status report on project’s capacity utilization, production output, productivity/efficiency level, employment level, value creation.
- Detailed report on post-financing economic benefit of project.
- Applicants shall notify CBN of submitted applications via a dedicated online portal https://100for100ppp.ng/ for tracking and monitoring application status.
Selection Criteria
Selection of application under the 100-for100 PPP intervention is based on five criteria:
|
Selection Criteria |
Production Efficiency & Scalability |
Local Content Capacity |
Human Capital Development |
Operating Sector |
Economic Contribution |
|
Parameters |
Capacity utilization & Scalability |
Scale of locally sourced raw materials. |
Job creation & capacity building |
Potentials of operating sector |
Contributions to key macroeconomic indicators |
Disbursement
- Participating financial institutions (PFIs) shall receive applications and conduct due diligence on applications based on business and credit considerations.
- Upon approval by PFI’s credit committee, lending bank shall forward eligible private sector companies to CBN.
- The CBN will screen and finance eligible applicants in 100 days and rolling over every 100 days.
- The Bank will conduct internal review of applications to ensure compliance with stipulated requirements.
- Then, the CBN releases the approved sum to PFIs for onward disbursement to selected private sector companies.
- Beneficiaries would be published in National Dailies for the public to confirm details of activities financed.
Disclaimer
This article is written for information purposes only. The Lagos State Employment Trust Fund (LSETF) shall not be liable or subject to any inquiries regarding loan application and processing.
