The Central Bank of Nigeria (CBN) has set conditions for companies in the healthcare sector to access the N100 billion loan provided to support their business. The new guidelines would determine the firms to benefit from the financial assistance.
This credit facility is expected to cushion the economic fallout of the Coronavirus pandemic. The outbreak had forced many companies to stop operation following the lockdown, and with businesses gradually reopening, the N100 billion is meant to help firms in the healthcare sector find their feet.
According to the CBN, each firm has access to a maximum of N2 billion, with an interest rate for the intervention fund pegged at five per cent per annum until February 28, 2021. However, the interest rate will increase to nine per cent by March 2021.
What is expected from firms in need of loan
The CBN issued a directive that firms interested in the palliative should direct their applications to either a Deposit Money Bank or a Development Finance Institution they prefer. According to a report by Punch, the application should be accompanied with a bankable business plan.
The financial institutions will appraise and conduct due diligence on the applications submitted by the firms. If approved by the financial institutions’ Credit Committee, the CBN will receive the application and other necessary documents attached to the application.
What the banks must do after releasing funds
Afterwards, the CBN will process and disburse the requested funds to the financial institution of the successful application, while the financial institution, which will bear the credit risk, would release the funds to the firm.
Each financial institution is expected to monitor the project for which the fund was received, recover the loan from the applicants, as well as maintain records of the beneficiaries and facilities. They would also be expected to register all movable assets with the National Collateral Registry.
Part of the responsibilities of the financial institutions is to make available, the periodic returns in the prescribed format on the scheme to the CBN, ensure compliance with the guidelines, while also taking charge of any other duties which may be prescribed by the CBN at any time.
Firms eligible to apply for the N100 billion loan
The loan is an intervention fund for the healthcare industry which is enormous and doesn’t end at healthcare manufacturers. The following are firms qualified to apply for the financial assistance; healthcare product manufacturers – pharmaceutical drugs and medical equipment.
The list also includes healthcare service providers/medical facilities – hospitals/clinics, diagnostic centres/laboratories, fitness and wellness centres, rehabilitation centres, dialysis centres and blood banks, pharmaceutical/medical products distribution and logistics services; and other human healthcare service providers as prescribed by the CBN.
Activities eligible for the funds
It was stated that activities or projects that would be considered for the fund include, manufacturing of pharmaceutical drugs and medical equipment; establishment/expansion/upgrade of basic and specialised healthcare facilities; and medical/pharmaceutical supplies.
Also on the list are medical/pharmaceutical research and development; distribution of medical/pharmaceutical drugs and supplies; Manufacturing of medical/pharmaceutical drugs distribution technology; and any other healthcare value chain activity the CBN prescribes from time to time.
