CBN removes guarantor rule. Households and small businesses applying for loans to survive Covid-19 economic hardship no longer require guarantors, the Central Bank says.
The bank is disbursing loans to this class of persons from a N50 billion COVID-19 Targeted Credit Facility.
Since the announcement of the palliative, thousands of applicants met a stonewall with usual stiff loan requirements. The biggest obstacle was introducing a guarantor for the loan.
Officials said CBN waived the guarantor requirement to ensure that loans actually get to those that need it most.
“Bu they must pay back,” the bank however said.
A CBN official said applicants are stressed about the policy.
“The CBN wants to minimize stress on applicants but that doesn’t mean that they will not pay back the loan. They will.”
Govt approved a N50billion COVID-19 Targeted Credit Facility for households and SMEs to mitigate harsh impact of the pandemic.
Consequently, Government is targeting three categories of persons for the loan. According to CBN, they include:
- Households with verifiable evidence of livelihood adversely impacted by COVID-19; and
- Existing enterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic.
- Enterprises with bankable plans to take advantage of opportunities arising from the COVID-19 pandemic
NIRSAL Microfinance Bank (NMFB), a CBN subsidiary company, manages the disbursement.
CBN removes guarantor rule for Covid-19 loan