The Federal Government has slashed the collateral conditions attached by the Central Bank of Nigeria for banks to access the N220bn intervention fund for the Micro, Small and Medium Enterprises sector from 75 to 50 percent.
The decision was taken at the second meeting of the National Council on MSMEs presided over by Vice President Namadi Sambo at the Presidential Villa, Abuja on Tuesday.
Before the downward review, part of the conditions for banks to access the N220bn fund is the need for them to collaterise whatever amount they are applying for from the CBN to the tune of 75 percent.
Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, announced the decision at a press briefing held at the end of the meeting.
Aganga said the decision was taken based on the recommendations of a sub-committee chaired by the Minister of National Planning and the contributions made by the Governor, Central Bank of Nigeria during the meeting.
He said, “Based on the comments of the CBN governor, the council took certain decisions. The first is that access to collateral requirements which was initially 75 per cent, which made it difficult for some commercial banks to be able to access, has been reduced to 50 percent.
“All inclusive interest rate must not exceed nine per cent. That has always been the directive of the CBN and we have stuck to that.
“However, the CBN is disbursing to these banks and the Financial Institutions and others at two percent from the original interest rate of three percent.”
The minister added that on the need for women to have access to the fund, the President had already announced that about 60 percent of the fund be made available to women.
He said men and women with disabilities have also been prioritised in the disbursement.
Minister of National Planning, Dr. Suleman Abubakar, said in addition to the collateral requirements approved by council, it also approved that the collateral requirements of 50 per cent of Micro Finance Banks be progressively reduced by period of six to nine based on the ratings of the MFBs. Click to signup for FREE news updates, latest information and hottest gists everyday
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uhhmmmm, Namadi Sambo. Election is good ooo
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