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Need Cash? Here are 5 cheap CBN loans you can access

If you are a Nigerian searching for a quick infusion of cash to meet costs or expand, looking into the Central Bank of Nigeria’s low-interest rates may be the way to go to avoid paying excessive interest to loan sharks or commercial banks.

The Central Bank of Nigeria has a series of low-interest loans aimed at spurring economic growth in Nigeria. However, to battle inflation, the apex bank was forced to raise its intervention interest rate.

The central bank raised the interest rate on all intervention loans from 5% to 9%, beginning July 20, 2022. This means that industries like agriculture, power, and aviation, which have benefited from trillions of dollars in central bank intervention money, would have to pay.

Nonetheless, considering Nigeria’s galloping inflation rate of 20.52% in the month of August 2022 and high Monetary Policy rate of 14%,  the CBN intervention loans are still the cheapest in the market.

Here are some CBN loans to consider 

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Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS)

  • The CBN oversees the Federal Government of Nigeria’s intervention program, known as AGSMEIS. The loan is primarily intended for micro, small, and medium-sized businesses (MSMEs) in an effort to boost employment and promote sustainable economic growth.
  • An applicant can obtain up to N10 million through the CBN AGSMEIS Loan at 9% annual interest, 7 years in length, and an 18-month moratorium. The CBN AGSMEIS Loan is available to businesses engaged in all aspects of the agricultural value chain, including input supply, production, storage, processing, logistics, and marketing. MSMEs in the real industry, which includes petrochemicals, mining, and manufacturing.
  • MSMEs in the service sector including information and communication technology (ICT) and the creative industry. Other activities as may be determined by the Bankers’ Committee from time to time.

CBN Anchor Borrower’s Programme (ABP)

  • The Anchor Borrowers’ Programme is a Central Bank of Nigeria intervention scheme, that is a single digit Loan, established by the Federal Government, in 2015, for the purpose of boosting the agricultural sector of the economy. It is designed to create an economic linkage between small holder famers and agro-processors/Anchors.
  • The initiative takes a value chain approach, connecting input to production, processing, and marketing. The scheme is aimed at smallholder farmers in order to improve their access to high-quality agricultural inputs and, as a result, output that meets international standards.
  • The Anchor Borrower Program essentially provides farmers with loans with no collateral. They are also given agricultural inputs such as seeds and fertilizer. Loans are repaid in cash or in harvested produce of equal value. This loan is available to businesses that use agricultural goods as raw materials (for manufacture). In other words, agricultural companies.
  • The CBN disclosed that  “Between May and June 2022, under the Anchor Borrowers’ Programme (ABP), the Bank released the sum of N3.62 billion, as disbursements to 12 projects for the cultivation of rice, wheat, and maize, bringing the cumulative disbursement under the Programme to N1.01 trillion, to over 4.21 million smallholder farmers cultivating 21 commodities across the country.”
  • With this scheme, the CBN seeks to boost the production of cassava, cotton, maize, poultry, rice, sorghum, tomatoes, and more.

CBN Commercial Agriculture Credit Scheme (CACS).

  • Agro-businesses might benefit from the Commercial Agriculture Credit Scheme of the Central Bank of Nigeria. The CBN and the Federal Ministry of Agriculture both helped to develop this facility. It aims to accelerate the development of Nigeria’s agricultural sector, create jobs, and improve food security by making loans to eligible agro-allied enterprises.
  • The interest rate on this program is 9%. Borrowing amounts of up to N2 billion Naira are possible, with loan terms of up to 60 months. If your business is involved in activities such as crop cultivation, fishing, or animal rearing, you may be eligible for the CACS fund.
  • The Bank also disbursed “N3.72 billion to finance three (3) large-scale agricultural projects under the Commercial Agriculture Credit Scheme (CACS). These disbursements brought the cumulative disbursements under this Scheme to N744.32 billion for 678 projects in agro-production and agro-processing as June 2022.”

CBN Real Sector Support Facility (RSSF)

  • The Real Sector Support Facility aims to boost output, create jobs, diversify the revenue base, enhance foreign exchange, and give inputs to the industrial sector on a long-term basis for the economy.
  • According to the Central Bank, as part of its effort to boost the manufacturing sector, the CBN disbursed N113.08 billion to 19 new projects under the Real Sector Facility. The funds were utilized for both greenfield and brownfield projects under the COVID-19 Intervention for the Manufacturing Sector (CIMS) and the Real Sector Support Facility from Differentiated Cash Reserve Requirement (RSSF-DCRR).
  • The apex bank also stated that “Cumulative disbursements under the Real Sector Facility currently stands at N2.183 trillion for the financing of 414 real sector projects across the country. Furthermore, under the 100 for 100 Policy on Production and Productivity”

CBN 100 for 100 Policy on Production and Productivity (PPP)

  • The Central Bank of Nigeria (CBN ) launched the 100 for 100 Policy on Production and Productivity (PPP) targeted at private companies who have a project to fund and can apply for as much as N5 billion under the scheme.
  • The initiative, 100 for 100 PPP, is a financial instrument designed to create the flow of finance and investments to enterprises with the potential to catalyse sustainable economic growth trajectory, accelerate structural transformation, promote diversification, and improve productivity.
  • The  initiative is funded from the CBN’s Real Sector Support Facility-Differentiated Cash Reserve Requirement (RSSF-DCRR) window or any other funding window as may be determined by the CBN.
  • The Apex bank stated at the last MPC that “under the 100 for 100 Policy on Production and Productivity, the Bank has released N9.98 billion for five (5) projects, bringing the cumulative disbursements under the intervention to N68.13 billion for 48 projects, comprising twenty-six (26) in manufacturing, seventeen (17) in agriculture, three (3) in healthcare and two (2) in the services sector.”

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