Business Finance News Updates

CBN finetunes plan to grant interest-free loans to SMEs

The Central Bank has announced that it will release a framework to add an interest-free type of loan to agriculture farmers and small businesses affected negatively by Covid-19.

The nation’s banker has approved over N432Bn for lending to two categories of borrowers in this year 2020 – farmers applying for Anchor Borrowers Programme (ABP) and households and small businesses for the Targeted Credit Facility (TCF) for those affected by the Covid-19 pandemic.

 Borrowers of both facilities have hitherto been required to produce either a guarantor or other collateral-backed securities in order to access the loans.

The sum of N432billion is specifically reserved for lending through the ABP programme to “fund the value chains of nine commodities in the 2020 wet season farming,” CBN said in a Tweet.

CBN hopes that this huge financial commitment will help to prevent the country from sliding into a recession by using it to support 1.1million farmers to produce 8.3million metric tons of selected crops.

Farmers who will get the loans are those that will be organized through cooperatives and associations around one million hectares of farmland to aggressively produce nine specified commodities.

NEXT: How to access ABP and TCF loans from NIRSAL