Central Bank of Nigeria, CBN Loan.Tired of applying for loans without Success? Wondering how to apply to get your desired loan from CBN for your business or are you looking for a start-up capital and you have no clue on how to go about it?
Here, we offer you current and relevant information that will aid your search for a CBN loan and answer your basic questions on how to acquire CBN loan successfully.
The Central Bank of Nigeria CBN, Loan is most favourable to micro small and medium scale Enterprises with low and affordable interest rate through working with funding agencies and financial institutions to provide financial loans.
Below is all you need to know about CBN loan.
Central Bank of Nigeria and it’s Functions.
The Central Bank of Nigeria,CBN,which is Nigeria’s topmost Bank,is concerned with the responsibility of managing the monetary policies of Nigeria. CBN is owned by the Federal Republic of Nigeria but has its own Governor,who is currently Mr Godwin Emefiele, appointed by the Senate of Nigeria.
CBN functions in the capacity of
- Managing inflation in Nigeria through regulation and stability of the prices.
- Regulation of Banks in Nigeria and their policies.
- Bringing stability into the financial condition of the nation.
- Issuing of loans to Businesses which is achieved through several development financing schemes.
CBN is able to achieve this through the medium of data collection and analysis from micro finance banks, commercial banks,credit unions,insurers and mortgage companies.
Central Bank of Nigeria, CBN Loan.
The Central Bank of Nigeria,CBN, collaborates with other Financial Governmental Agencies such as Nigerian Export – Import Bank(NEXIM), Development Bank of Nigeria (DBN), and The Bank of Agriculture (BOA) to provide funding schemes and loans to small and medium scale businesses in Nigeria with low interest rate, with the aim of promoting economic growth in Nigeria.
The scheme you apply for can determine the maximum amount of money that can be loaned to you by the Participating Financial institutions(PFI). It can range from few millions to large amount of billions of naira depending on the nature of your business and the value of the collateral given.
Who is Eligible for CBN Loan.
This includes all Micro Small and Medium Scale Enterprises (MSMEs) in the Agricultural Sector, Educational sector, Real Sector- which includes manufacturing,chemicals and Petro chemicals, service Sector- includes technology and creative services,and other business as that meets CBN eligibility criteria.
What are the Required CBN Loan?
CBN financial fundings and loan may requires the following.
- Customer application
- Company Registration and certificate of incorporation
- Cash Flow Analysis
- Bank statement at least in the last 12month.
- Business plan
- Audited Financials( optional and depending on the kind of loan you need)
- Valid means of identification.
- Valuation Report of property to be pleaded as collateral.
- Legal Mortgage over suitable property to be pleaded as collateral.
- Depending on the financial scheme,you may be asked to bring other documents but these are the basic ones.
How do I apply for a CBN loan?
CBN offer their loans indirectly through the aid of Participating Financial Institutions(PFI) of their various financial schemes. Hence, you will need to visit an eligible PFI and indicate your interest for a CBN loan. You will be told of available schemes that will suit your business and the purpose of the loan. After that, an assessment will be made on your business sustainability. Then the Bank will apply to CBN for the loan on your behalf. CBN will carry out its own internal evaluation before which the Loan will be disbursed to the bank.
CBN loans waiting period are affected by scheme you applied for,nature of your business and the purpose of the loan. However Small and medium enterprises are quickly favoured as a means of economic and financial growth and stability in the nation.
Duration of time to pay back CBN,Loan?
The Duration is dependent on several factors such as the loan scheme you applied for,the purpose of the loan and possibly the nature of your business,etc. It could take about one to ten years incubation or moratorium period.
Interest Rate of Central Bank of Nigeria Loan
Central Bank of Nigeria,CBN, loan interest from the CBN is at the rate of 9percent , although it isn’t fixed as depending on the discretion of CBN and it’s internal evaluation,it may reduce the interest rate. Some of the financial funding schemes initiated by CBN also operate at a lower interest rate.
Central Bank of Nigeria,CBN, Grants
The Central Bank of Nigeria CBN mostly releases loans to help Micro,Small and Medium scale Businesses (MSMs) grow,however, periodically,grants can be awarded to eligible businesses. You will have to inquire directly from CBN to know when such Grants are available.
CBN and Other Commercial Bank Loans.
Since the CBN loan is specifically for a particular sector and group,there could be some challenges when accessing it’s loan which some commercial banks don’t consider when loaning money. CBN loans also are mostly favourable to Small and Medium scale Enterprises as the allow longer repayment periods as well as cheaper interest rate.
Since CBN works with intermediary and commercial banks and they have their own prerequisites and collateral conditions and terms, however,on some occasions are not always required irrespective of the bank you apply through. There are acceptable forms of collateral and they include;
- Obligations of the Federal Government of Nigeria including Federal Government of Nigeria ,FGN,Bonds, FGN Eurobonds,FGN Treasury Bills.
- Obligations of State Government or agencies of the Federal Government of Nigeria.
- Other non-government Debt instrument
- Physical assets eg Properties
- Third party guarantors
CBN loan remains the best when compared towards other loans from Commercial banks especially considering the interest rate and the how favourable the duration of payment is towards micro,small and medium enterprises.