The Central Bank of Nigeria (CBN) said on Thursday that interest rate on the health intervention facility shall revert back to 9% p.a. (all inclusive) as from 1st March 2021.
As part of proactive measures to cushion the impact of the coronavirus (COVID-19) pandemic on the economy, the CBN introduced a N100 billion credit support intervention for the healthcare industry.
Consequently, the regulator on Thursday issued operational guidelines for credit support to the healthcare sector for indigenous pharmaceutical companies and healthcare practitioners intending to build or expand their capacity.
The guideline, which was signed by Kevin Amugo, director, financial policy and regulation stated that interest rate under the intervention shall be at not more than 5.0 percent per annum, (all inclusive) up to February 28, 2021.
In terms of working capital, the facility requires 20 percent of the average of three years of the company’s turnover subject to a maximum of N500 million per obligor. Where the enterprise is not up to three years in operation, 20 percent of the previous year’s turnover will suffice. The term loan is put at maximum of N2 billion per obligor.
The Scheme shall be funded from the Real Sector Support Facility – Differentiated Cash Reserves Requirement (RSSF-DCRR).
The objective of the scheme include to reduce health tourism to conserve foreign exchange; provide long-term, low cost finance for healthcare infrastructure development that would lead to the evolvement of world-class healthcare facilities in the country; improve access to affordable credit by indigenous pharmaceutical companies to expand their operations and comply with the World Health
Organization’s Good Manufacturing Practices (WHO GMP); and to support the provision of shared services through one-stop healthcare solution to enhance competition and reduce the cost of healthcare delivery in the country.
Eligible participants under the scheme include Healthcare product manufacturers – pharmaceutical drugs and medical equipment; healthcare service providers/medical facilities – hospitals/clinics, diagnostic centres/laboratories, fitness and wellness centres, rehabilitation centres, dialysis centres, blood banks, etc.; pharmaceutical/medical products distribution and logistics services; and other human healthcare service providers as may be determined by the CBN from time to time.
The eligible financial institutions are Deposit Money Banks (DMBs); and Development Finance Institutions (DFIs).
According to the guidelines the collateral to be pledged by borrowers under the programme shall be as may be required under the RSSF-DCRR.
The Apex bank said Periodic joint monitoring of activities financed under the Scheme will be conducted by the PFI and the CBN.
Also, the CBN has issued the guidelines for the implementation of the N50 billion targeted credit facility for households and Small and Medium sized Enterprises (SMEs that have been particularly hard hit by Covid-19.
The broad objectives of the CBN’s N50 billion Targeted Credit Facility include, to cushion the adverse effects of COVID-19 on households and MSMEs; support households and MSMEs whose economic activities have been significantly disrupted by the COVID-19 pandemic, stimulate credit to MSMEs to expand their productive capacity through equipment upgrade, and research and development.
Source:Businessday.ng
