Regulatory Alerts2010-05-21 | DFD20100521N200 Billion Intervention Fund For Re-Financing And Restructuring Of Banks Loans To The Manufacturing Sector
The Nigeria Economic Stimulus Facility (NESF) is a financial intervention program established by the Central Bank of Nigeria (CBN), in collaboration with the Bank of Industry (BOI), and organized private sector associations. This facility aims to provide low-interest loans to small businesses impacted by COVID-19 pandemic and other economic shocks. The NESF's primary objectives are to stimulate economic growth, provide liquidity support, create employment opportunities, and preserve viable small businesses. Participating financial institutions, also known as "Participating Banks," lend funds at a 7% annual interest rate. The program offers loans with a maximum tenor of five years, including a two-year moratorium on principal repayments. Eligible borrowers must be small businesses in sectors such as agriculture, solid minerals, and manufacturing that have been adversely affected by economic shocks. These businesses must also be members of the organized private sector associations or part of Micro, Small, and Medium Enterprises (MSMEs). The facility prioritizes women-owned enterprises and small businesses with a turnover of less than N100 million. The CBN provides funds for the intervention through debentures issued to BOI, which then lends the funds to Participating Banks at 1% interest. The program operates under strict guidelines that dictate borrower eligibility, loan repayment schedules, and other financial criteria.