Central Bank of Nigeria (CBN) has given guidelines on the N100 billion pharmaceutical fund it launched in the wake of coronavirus pandemic.
In the circular, N2 billion was set as maximum obligor limit for term loans while companies seeking working capital can get a maximum of N500 million.
Specifically, each company will be eligible to take loans amounting to 20 per cent of the average of three year’s turnover.
“Interest rate under the intervention shall be at not more than 5.0% p.a. (all-inclusive) up to February 28, 2021, and thereafter, interest on the facility shall revert back to 9% p.a. (all-inclusive) as from March 1st 2021.”
Working capital shall be for a maximum period of one year, with provision for rollover not more than three years.
Term loan shall have a maximum tenor of not more than 10 years with a maximum of a one-year moratorium on repayment. However, in case of construction, the tenor shall be determined by the completion date.
In the document issued by Director, Development Finance Department, the fund was created as part of proactive measures to cushion the impact of the coronavirus (COVID-19) pandemic on the economy, introduced a N100 billion credit support intervention for the healthcare industry.
“This is with a view to strengthening the sector’s capacity to meet the potential increase in demand for healthcare products and services.
“Specifically, the scheme is to provide credit to indigenous pharmaceutical companies and other healthcare value chain players intending to build or expand capacity.
“The Scheme is expected to increase private and public investment in the healthcare sector, facilitate improvements in healthcare delivery and reduce medical tourism to enhance foreign exchange conservation.”
CBN explained that interest rate under the intervention shall be maximum at a maximum of five per cent up to February 28, 2021, and thereafter, interest on the facility shall revert back to 9% p.a. (all-inclusive) as from March 1, 2021.
April 12, 2020