5 cheap CBN loans to access in 2022

If you are a Nigerian looking for a quick injection of cash to cover costs or expand, consider the Central Bank of Nigeria low interest rates can be the way to go to avoid paying excessive interest at loan sharks or commercial banks.

The Central Bank of Nigeria has a series of low interest loans aimed at stimulating economic growth in Nigeria. However, to fight against inflation, the apex bank was forced to increase its intervention interest rate.

The central bank raised the interest rate on all intervention loans from 5% to 9%, effective July 20, 2022. This means that sectors like agriculture, electricity and aviation, which benefited from trillions of dollars in central bank intervention funds, must pay.

Nevertheless, given Nigeria’s runaway inflation rate of 20.52% as of August 2022 and the high monetary policy rate of 14%, CBN intervention loans remain the cheapest in the market.

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recommended reading: Top 10 Loan Apps in Nigeria in 2022

Here are some CBN loans to consider

Agribusiness Small and Medium Enterprise Investment Program (AGSMEIS)

  • The CBN oversees the intervention program of the Federal Government of Nigeria, known as AGSMEIS. The loan is primarily targeted at micro, small and medium-sized enterprises (MSMEs) with the aim of boosting employment and promoting sustainable economic growth.
  • An applicant can obtain up to N10 million through the CBN AGSMEIS loan at 9% annual interest, with a term of 7 years and a moratorium of 18 months. The AGSMEIS CBN loan is available for businesses engaged in all aspects of the agricultural value chain, including input supply, production, storage, processing, logistics and marketing. MSMEs in real industry, which includes petrochemicals, mining and manufacturing.

CBN Prime Borrower Program (ABP)

  • The Anchor Borrower Scheme is a Central Bank of Nigeria intervention scheme, i.e., single digit loan, established by the Federal Government in 2015 with the aim of boosting Nigeria’s agricultural sector. ‘economy. It is designed to create an economic link between smallholder farmers and agro-processors/anchors.
  • The initiative takes a value chain approach, linking inputs to production, processing and marketing. The program targets smallholder farmers to improve their access to high-quality agricultural inputs and, therefore, production that meets international standards.
  • The Anchor Borrower program essentially provides farmers with unsecured loans. They also receive agricultural inputs such as seeds and fertilizers. Loans are repaid in cash or harvested produce of equal value. This loan is available for companies that use agricultural products as raw materials (for manufacturing). In other words, agricultural enterprises.
  • The CBN revealed that “Between May and June 2022, under the Anchor Borrower Program (ABP), the Bank disbursed the sum of N3.62 billion, as disbursements for 12 rice, wheat and maize, bringing the cumulative disbursement under the program to N1.01 trillion, to over 4.21 million smallholder farmers growing 21 commodities across the country.
  • With this program, the CBN seeks to stimulate the production of cassava, cotton, maize, poultry, rice, sorghum, tomatoes, etc.

CBN Commercial Agriculture Credit Scheme (CACS)

  • Agribusinesses could benefit from the Central Bank of Nigeria’s Commercial Agriculture Credit Scheme. The CBN and the Federal Ministry of Agriculture have both contributed to the development of this facility. It aims to accelerate the development of the Nigerian agricultural sector, create jobs and improve food security by providing loans to eligible agri-allied enterprises.
  • The interest rate for this program is 9%. Loan amounts of up to N2 billion are possible, with loan terms of up to 60 months. If your business is involved in activities such as cultivation, fishing or animal husbandry, you may be eligible for the CACS fund.
  • The Bank has also disbursed “3.72 billion naira to finance three (3) large-scale agricultural projects under the Credit for Commercial Agriculture Scheme (CACS). These disbursements brought cumulative disbursements under this program to N744.32 billion for 678 agricultural production and agricultural transformation projects as of June 2022.”

CBN Real Sector Support Facility (RSSF)

  • The Real Sector Facility aims to boost production, create jobs, diversify the revenue base, increase foreign exchange and provide inputs to the industrial sector on a long-term basis for the economy.
  • According to the Central Bank, as part of its efforts to boost the manufacturing sector, the CBN has disbursed N113.08 billion for 19 new projects under the Real Sector Facility. The funds were used for both greenfield and brownfield projects under the COVID-19 Response for Manufacturing (CIMS) and the Real Sector Support Facility from cash reserves differentiated (RSSF-DCRR).
  • The apex bank also said that “Cumulative disbursements under the Real Sector Facility currently stand at N2.183 billion for the financing of 414 real sector projects across the country. In addition, as part of the 100 percent policy on production and productivity”

CBN 100 Percent Policy on Production and Productivity (PPP)

  • The Central Bank of Nigeria (CBN) has launched the 100 Percent Policy on Production and Productivity (PPP) for private companies that have a project to finance and can apply for up to N5 billion under the scheme.
  • The initiative, 100 per 100 PPP, is a financial instrument designed to create a flow of financing and investments to companies with the potential to catalyze a trajectory of sustainable economic growth, accelerate structural transformation, promote diversification and improve productivity.
  • The initiative is funded through the CBN’s Real Sector Support Facility (RSSF-DCRR) Differentiated Cash Reserves window or such other funding window as may be determined by the CBN.
  • Apex Bank said at the last MPC that “Under the 100 percent policy on production and productivity, the Bank has disbursed N9.98 billion for five (5) projects, bringing cumulative disbursements under the intervention to N68.13 billion. naira for 48 projects, including twenty-six (26) in manufacturing, seventeen (17) in agriculture, three (3) in health and two (2) in the service sector.

James V. Hayes