Why we’re not disbursing N50bn CBN credit loan facility yet – NIRSAL

In a bid to revive the economy, the Central Bank of Nigeria (CBN) to help mitigate the impact of the coronavirus pandemic on the economy and Small Enterprises, the apex bank introduced an N50 billion Targeted Credit Facility (TCF) in March 2020, to support households and micro, small and medium enterprises (MSMEs) that have been affected by the pandemic.

The facility from CBN, which is to be disbursed through the NIRSAL Microfinance Bank Ltd (NMBL), had recorded about 80,000 applications as at April.
However, this program has not been without some hiccups with many applicants complaining about difficulties in assessing the facility.
In an interview with ChannelsTV, the Managing Director of NIRSAL Microfinance Bank Plc, Abubakar Kure, explained why there were difficulties in disbursing the facility to the applicants.
He disclosed that the nationwide lockdown and restrictions had been a major challenge to the smooth processing of the facility. This was also compounded by the inability of some of the applicants to secure guarantors.

According to Kure, “You are all aware of the lockdown across the country and major cities. We have lockdown around Kano, Lagos, Port Harcourt, and incidentally Kaduna. So all these major cities constitute a significant part of the applicants who applied for COVID [loans]. We are actually thinking outside the box to see how we can reach them so that they can come and have the loans.

“Currently what we do is that we are using digitalization in the form of emails. We send emails to those who have email accounts, we print their offer letters, send back to them, do the documentations and they are able to drawdown.

‘’The most important thing is about the lockdown and that’s why the credit facility was created. It also constitutes a challenge.”

The NMFB boss, while explaining, also encouraged qualified individuals to come forward and guarantee the approved applicants because they had viable businesses. He said that the ones that had been evaluated were very successful SMEs with the capacity to pay back.

On why the difficulty in disbursing the credit facility considering that it was supposed to be a short term facility to cater for businesses and households during the period of pandemic and lockdown, Mr Kure said, “This is a loan and not a grant, you are required to sign offer letters in terms of documentation that need to be signed so that it requires physical interaction between the bank i.e. NIRSAL Microfinance bank as well as the customers. So customers are unable to even come to sign the documentations and customers are even unable to get guarantors.”

However, as part of the solution to this challenge, Kure said the bank was trying to enlighten the customers about other channels of payment like mobile applications and the USSD. He said that those that we’re able to finish their documentation and sign offer letters, a fundamental aspect of the loan, could drawdown.