CBN raises households’ credit to N300bn, cautions against undue tastes for foreign products

*There is one-year extension of the moratorium on principal repayments for CBN intervention facilities, and regulatory forbearance was granted to banks to restructure loans given to sectors that were severely affected by the pandemic ─Godwin Emefiele, Governor of Central Bank of Nigeria

Alexander Davis | ConsumerConnect

In its bid to further cushion the damaging effects of the COVID-19 pandemic on Nigerian consumers, the Central Bank of Nigeria (CBN) has jacked up the Targeted Credit Facility (TCF) meant for households and small and medium enterprises (SMEs) from initial N150billion to N300 billion.

ConsumerConnect reports the CBN’s expansion of the credit line is designed to enable the facility to reach more households and small businesses in the country.

Mr. Godwin Emefiele, Governor of Central Bank of Nigeria, in a ‘Response by the Monetary and Fiscal Authorities to COVID-19’ released report, disclosed that the TCF funds were already being disbursed through the NIRSAL Microfinance Bank.

The CBN Governor said already N149.21 billion had been disbursed to 316,869 beneficiaries.

According to Emefiele, given the resounding success of this programme and its positive impact on output growth, the apex bank has decided to double the fund to N300 billion.

He stated the loan disbursements were based on the activity, cash flow, and industry size of the beneficiaries.

Each eligible small business can receive a maximum of N25 million while qualified households can access a maximum of N3 million each, said the governor.

He noted: “The increase is to accommodate many more beneficiaries and boost consumer expenditure which should positively impact output growth.

“Given the impact on COVID-19 on key economic variables earlier mentioned, the fiscal and monetary authorities took unprecedented measures to prevent any long-term damage to the growth prospects of our economy.”

There is one-year extension of the moratorium on principal repayments for CBN intervention facilities and regulatory forbearance was granted to banks to restructure loans given to sectors that were severely affected by the pandemic.

According to Emefiele, the CBN has also strengthened the Loan to Deposit ratio policy, which has resulted in a significant rise in loans provided by financial institutions to banking customers.

He added: “Total gross credit rose by over 21 percent over the past year, from N15.5 trillion to N19.54 trillion.

“The apex bank, he added has also disbursed Agri- Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) (N92.90 billion to 24,702 beneficiaries), Anchor Borrowers Programme (ABP) by the sum of N164.91 billion to 954,279 beneficiaries.”

The apex bank said it has also extended over N738 billion credit to manufacturers for manufacturing related activities to keep their operations running amid the pandemic.

Meanwhile, the Central Bank of Nigeria has advised Nigerian consumers to moderate their taste for foreign goods in order to stabilise the country’s economy.

Emefiele, gave the advice during an interactive session with stakeholders on the five-year policy thrust of the apex bank in Kaduna, Kaduna State capital, Sunday, December 6.

Represented on the occasion by Sam Okogbue, Assistant Director of Corporate Communications, the CBN Governor urged Nigerians “to return to production of what they consume.

“Nigerians should moderate their taste for and consumption of foreign food.”

The participants in the forum included Organised Labour and executives of commercial banks.

The best way to sustainably grow the economy was to produce “what we eat in the country,” declared the CBN Chief.

He recalled that in the ’70s, Nigeria invested in agriculture and production of basic items to cater for its needs and exported goods to strengthen the Naira and economy.

“If we do so, it will help government to stabilise the economy…. This would lower rate of unemployment and put the country back on track,” Emefiele stated.

Umar Biu, CBN Branch Controller, in Kaduna, also said that the engagement provided opportunity for the department and relevant players to painstakingly deliberate on way forward for the socio-economic development of the country.