Owners of small businesses have continued to commend the Targeted Credit Facility (TCF) introduced by the Central Bank of Nigeria (CBN) aimed at cushioning the adverse effects of the COVID-19 pandemic on enterprises in Nigeria.
No doubt, businesses around the world are currently feeling the heat of the pandemic, but the CBN, under its current leadership rolled out intervention initiatives to help sustain businesses and grow the economy,
Industry watchers believe that such intervention is among the reasons why the nation’s economy is gradually picking up after the losses occasioned by months of lockdown, adding that the positive effects of the TCF is visible.
According to them, many of the support schemes like the Anchor Borrowers’ Programme (ABP), the Real Sector Support Facility, Export Stimulation Scheme, and the Commercial Agricultural Credit Scheme, among others are target driven, stressing that such interventions were borne out of critical issues facing the nation’s economy.
All over the world, the Small and Medium-scale Enterprises (SMEs) sector is the backbone of major developed economies, as well as important contributors to employment, economic and export growth, hence the need for effective support.
In South Africa, SMEs account for 91per cent of businesses, 60per cent of employment and contribute 52per cent of total Gross Domestic Product (GDP). In Nigeria, SMEs contribute 48per cent of national GDP in the last five years, account for 96per cent of businesses and 84per cent of employment.
With a total number of about 17.4 million, they account for about 50per cent of industrial jobs and nearly 90per cent of the manufacturing sector, in terms of number of enterprises.
In response to the COVID-19 outbreak and spill over, CBN introduced a N50 billion TCF, as a stimulus package to support households and Micro, Small and Medium Enterprises (MSMEs) affected by the pandemic.
TCF was introduced in April 2020 and in March 2021, the apex bank reopened applications for the fund. This initiative has helped mitigate the negative effects of the COVID-19 pandemic on businesses, as many Nigerians have benefitted from it.
With the huge amount invested, no doubt, there is no gainsaying the fact that a good number of households and small businesses affected by the pandemic have benefited from the initiative.
CBN said. 600,000 applicants have so far benefited from various COVID-19 intervention funds, which many described as a step in the right direction, given the adverse effects of the COVID -19 pandemic on businesses in Nigeria and the world at large.
CBN is using the NIRSAL Micro Finance Bank (MFB) to implement this scheme, while the facility provides termed loans with categorised maximum limits to households and MSMEs who can verify adverse effect of the pandemic and must be willing to repay these loans over a period of 36 months.
Introduction
In its guideline for the implementation of the N50 billion Targeted Credit Facility, CBN said the corona virus (COVID-19) pandemic has led to unprecedented disruptions to global supply chains, sharp drop in global crude oil prices, turmoil in global stock and financial markets, massive cancellation of sporting and entertainment events, lockdown of large swaths movements of persons in many countries, and intercontinental travel bans/restrictions across critical air routes across the world.
These outcomes have had severe consequences on households’ livelihoods and business activities, resulting from drop in global demand, declined consumer confidence and slowdown in production.
In this respect, the Central Bank of Nigeria (CBN) introduced the N50 billion Targeted Credit Facility (TCF) as a stimulus package to support households and Micro, Small, and Medium Enterprises (MSMEs) affected by the COVID-19 pandemic.
The broad objectives of the 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.
Eligible participants include households with verifiable evidence of livelihood adversely impacted by COVID-19; existing enterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic, enterprises with bankable plans to take advantage of opportunities arising from the pandemic.
The Central Bank of Nigeria (CBN) has over the years rolled out initiatives in various sectors of the economy that are currently beneficial to businesses and the nation at large, supporting the reduction in the rate of unemployment in the country.
Speaking with Daily Champion, Alhaji Gbadebo Olatokunbo, a small business owner acknowledges the pro-activeness of the CBN to several man-made economic crises in Nigeria.
He said, many if not all the problems could be tagged political than economic-crises, which he said warranted the several interventions by CBN.
“There had been several interventions of the CBN, too numerous to mentioned, that were met with heavy-hammers of critics and whenever they were proven wrong with happenings in other more developed economy, silence become the norm, the noise just goes unnoticed,” he said.
Commending the apex bank’s several initiatives in various sectors of the economy, he however noted regulators in developed countries of the world supported, leading to the economic growth recorded in today in their economies.
Speaking further, Olatokunbo said interventions such as the TCF have cushioned the negative effects of the pandemic on businesses in Nigeria and should be commended.
He said, “You don’t hear commendation for a very great interventions in agricultural developments/poverty-alleviation and several others, but once it is CBN policies geared towards real economic growth, you hear barrage of criticism that couldn’t stand the test of good and critical analysis.
In his view, National President, Association of Micro-Entrepreneurs, Prince Saviour Iche said the CBN TCF for households and small businesses is a welcomed development.
During the lockdown families and businesses that depends on daily income to feed, were not able to eat, the initiative came at the right time.
He however, called on the regulatory authorities to do more in supporting Nigerians who are in dare need of funds to run their businesses.
He said, “The initiative will have a positive impact on the Nigerian economy if it is well implemented and the appropriate people are been reached. This is a token given to people for support. There is no how the economy will improve if the real sector is not empowered. It is the activities of the manufacturers that will bring the desired economic growth in Nigeria,” he said.
According to him, the economy of Nigeria will only have positive impact when the real steps are taken towards effective and sincere support, adding that the CBN is doing well in supporting SMEs in Nigeria.
Just recently, the Director, Corporation Communications of CBN, Osita Nwanisiobi said the regulator has received over 8 million applications for the TCF.
The regulator started with about N50 billion to N100 billion to N300 billion, and its currently talking about N400 billion.
According to Nwanisiobi, the TCF helped Nigeria exit recession and achieved the current Gross Domestic Product (GDP) growth rate of 5.01 per cent.
He said, “If you tell me that there are people who still need COVID-19 facility and who have not received it, honestly, I will agree with you.
“The governor, Godwin Emefiele is actually very passionate because he has also seen that what we have done in this regard also helped Nigerians exit recession and to post the kind of GDP that we have, and so he is poised to do more,” Nwanisiobi said.
Nwanisobi further said CBN has implemented about 37 intervention programmes, particularly in the agricultural sector, to boost the economy, lower inflation and create more jobs for the youth.
In its recent survey on SMEs in Nigeria, PWC stated that significant growth has been achieved in the MSME sector, adding that there is still much to be done.
Based on the above, the report noted that there is need to conduct an evaluation of SMEs in Nigeria with the aim of unlocking growth and development of the sector.
Also, the evaluation will assist in attaining a status report on the level of effect or impact of the existing funding and other support strategies on the target recipients; as well as aid in driving policy assessment, redirection and formulation going forward, especially in this present economic climate.
