How to Access the N100 Billion Central Bank of Nigeria (CBN) Intervention fund for the Healthcare Industry | Legal Panic

How to Access the N100 Billion Central Bank of Nigeria (CBN) Intervention fund for the Healthcare Industry

Here, we will be discussing how to access the N100 Billion Central Bank of Nigeria intervention fund for the Healthcare Industry during and after the COVID-19 pandemic era.

The coronavirus (COVID-19) pandemic affects virtually all spheres of the economy.

Therefore the Central Bank of Nigeria (CBN) in its efforts to cushion the impact of the pandemic on the economy, introduced the N100billion credit support intervention to the health care industry intending to strengthen the industry’s capacity to meet the potential increase in its products and services; and reduce overseas medical tourism.

Central Bank of Nigeria Intervention fund for the Healthcare Industry

Objectives of the Intervention

The broad objectives of the Intervention are to reduce or eliminate medical tourism to conserve foreign exchange; increase the capacity of local healthcare providers and pharmaceutical companies; provide long term low-cost finance for healthcare infrastructure, and support provision of shared services thereby reducing the cost of healthcare delivery in the country.

These objectives will widely show us how to access the N100 billion Central Bank of Nigeria intervention fund for the Healthcare Industry.

Suitable / Eligible Participants

  1. Health product manufacturers – pharmaceutical drugs and medical equipment.
  2. Health service providers / medical facilities – hospitals/clinics, diagnostic centres/laboratories, fitness and wellness centres, rehabilitation centres, dialysis centres, blood banks, etc.
  3. Pharmaceuticals / medical products distribution and logistics services;
  4. Other human healthcare service providers as may be determined by the CBN from time to time.

Eligible Businesses for the N100 billion CBN intervention fund for the Healthcare industry

  • Manufacturing of pharmaceutical drugs and medical equipment.
  • Establishment/expansion/upgrade of basic and specialized healthcare facilities
  • Medical / pharmaceutical research and development
  • Medical/pharmaceutical supplies
  • Distribution of medical/pharmaceutical drugs and supplies
  • Manufacturing of medical pharmaceutical drugs distribution technologies;
  • Any other healthcare value chain activity as may be prescribed by the CBN.

Funding

The Facility shall be funded from the real sector support facility – Differentiated Cash Reserves Equipment (RSSF – DCRR).

Participating Financial Institutions

Deposit Money Banks (DMBs)

Development Finance Institutions (DFIs).

Loan Limit

Working Capital – maximum of 20% of the average of the previous 3 years’ annual turnover subject to a maximum of N500million per obligor (where the enterprise is not up to 3 years in operation, 20% of the previous year’s turnover will suffice.

Term Loans – maximum of N2billion per obligor.

Interest Rate

The interest rate under the intervention shall be 5% per annum (all-inclusive) up to 28th February 2021 and thereafter, the interest on the facility shall revert to 9% per annum (all-inclusive) as from 1st March 2021.

 Loan Tenor

  • Working capital shall be for a maximum period of one (1) year, with provision for rollover not more than three (3) years. ii. Term loan shall have a maximum tenor of not more than 10 years with a maximum of a year moratorium on repayment. However, in case of construction, the tenor shall be determined by the completion date. Working capital shall be for a maximum period of 1 year, with no option for rollover.
  • Term loan shall have a maximum tenor of not more than 36 Months with, at least, 12 Months moratorium.

Collaterals Requirements

The collateral to be pledged by borrowers under the scheme shall be as may be required under the RSSF-DCRR.

Interest and Principal Repayment

Interest and principal repayment shall be made on an instalment basis by the borrowers to the PFIs according to the approved repayment schedule.

Modalities

  • A corporate entity shall submit its application to a PFI of its choice with a bankable business plan
  • PFI shall appraise and conduct due diligence on the application.
  • Upon approval by the PFI’s Credit Committee, the application shall be submitted to CBN with relevant documents attached. 
  • CBN will process and disburse funds to the PFI for onward release to the project.

Monitoring and Reporting

Periodic joint monitoring of activities financed under the Scheme will be conducted by the PFI and the CBN.

Responsibilities of Stakeholders

For effective implementation of the Scheme, the responsibilities of the stakeholders shall include:

CBN

  • Provide the seed fund for the Scheme;
  • Release funds to PFIs for disbursement to successful applicants;
  • Review the Guidelines of the Facility as may be necessary;
  • Receive and process periodic returns from PFIs; and
  • Monitor and evaluate the implementation of the Scheme.

PFI

  • Receive and review applications submitted by its customers;
  • Undertake due diligence based on normal business considerations;
  • Bear the credit risk;
  • Issue offer letters and forward qualified applications to CBN;
  • Disburse the released funds to successful applicants;
  • Monitor the project and recover the loans from the beneficiaries;
  • Maintain adequate records of all beneficiaries and facilities;
  • Register all movable assets with the National Collateral Registry;
  • Forward periodic returns in the prescribed format on the Scheme to CBN;
  • Comply with the Guidelines; and
  • Carry out any other duties as the CBN may prescribe from time to time.

Borrower

  • Utilize the funds granted under the Scheme for the purpose for which it was granted;
  • Insure the project being financed;
  • Adhere strictly to the terms and conditions of the credit facility; 
  • Make the project and records available for inspection/verification by the CBN and PFI; and
  • Comply with the Guidelines of the Scheme.

Infractions

Delay and non-release of funds to beneficiaries within the timelines agreed on the offer letter shall attract penalty at the PFI’s maximum lending rate.

Discontinuation of a Credit Facility

Where a facility is repaid or otherwise discontinued, the PFI shall advise the CBN immediately, giving particulars of the facility.

Any outstanding amount under the facility is to be refunded to the CBN.

Exit Date

The exit date of this Intervention is 31st December 2030.

Guidelines

This guideline shall be subject to review from time to time as deem necessary by the CBN.

Conclusion

This is a laudable initiative from the CBN which must be given traction given that COVID-19 has dealt much blow to the healthcare system in Nigeria.

The healthcare industry constantly battles with funding which stunts it’s growth and aid frequent foreign medical tourism thereby depleting the nation’s foreign reserve.

This initiative will stem this tide. It will improve the healthcare which will also become affordable for the low-income earners who are suffering more casualties on daily also anticipate that the funds will be available to every business without favouritism or bias for anyone.

Finally, we will urge all beneficiaries to properly utilize the funds for the general benefit of the nation. We are happy you now know how to access the N100 billion Central Bank of Nigeria intervention fund for the Healthcare Industry

 

READ MORE: How to start an NGO in Nigeria – the ABC guide

 

 

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Enquiries:

You may direct your inquiries to –

Phone numbers – +234(0)8068786951, +234(0)8182031458, and +234(0)9018105443, 

Email – briefandcaselp@gmail.com

Disclaimer:

This an independent review from Brief & Case Legal Practitioners.

While we have taken the trouble to avoid misstatement of information to avoid any misstatement in the bulletin, it does not represent professional legal advice or form attorney-client relationship.

We advise you to seek legal or professional advice.

 

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One thought on “How to Access the N100 Billion Central Bank of Nigeria (CBN) Intervention fund for the Healthcare Industry

  • June 4, 2020 at 2:30 pm
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