Posted by News Express | 24 August 2018 | 852 times
The Central Bank of Nigeria (CBN) has underscored its intention to increase the flow of credit to the real sector of the economy, in order to consolidate and sustain the nation’s economic recovery.
It will be recalled that the CBN Monetary Policy Committee (MPC), at its 119th meeting held on July 23 and 24, 2018, introduced its revised guidelines for Accessing Real Sector Support Facility (RSSDF) through Cash Reserves Requirement (CRR)/Corporate Bonds (CBs).
Giving further clarifications on the guidelines on Thursday, the Bank’s acting Director of Corporate Communications, Mr. Isaac Okorafor, said that that CBN hoped to achieve the flow of credit to the real sector of the economy as deposit money banks (DMBs) would henceforth be incentivised to direct affordable, long-term bank credit to the manufacturing, agriculture, as well as other sectors considered by the Bank as employment and growth stimulating.
Mr. Okorafor disclosed that Corporate/Triple-A rated companies would be encouraged to issue long-term Corporate Bonds (CBs), adding that Corporate Bonds (CB) Funding Programme had been put in place. The programme, according to him, involves investment by the CBN and the general public in CBs issued by corporates subject to the intensified transparency requirements for participating corporates. He also noted that such requirements would include publishing through printing of an Information Memorandum spelling out the details of the projects for which the funds are required together with terms and conditions showing that these are long-term projects that are employment and growth stimulating.
Furthermore, he disclosed that the Bank had put in place a programme under the Differentiated Cash Reserves Requirement (DCRR) Regime whereby DMBs interested in providing Credit Financing to greenfield (new) and brownfield (expansion) projects in the real sector (Agriculture and Manufacturing) could request for the release of funds from their CRR to finance the projects; subject to DMBs providing verifiable evidence that the funds shall be directed at the approved projects by the CBN.
Making further clarifications, he said that the tenor for the Differentiated CRR would be a minimum of seven years with a two-year moratorium. For the Corporate Bonds (CBs) Programme, he said the tenor and the moratorium would be specified in the prospectus by the issuing corporation. He added that the maximum facility shall be N10 billion per project and facilities are to be administered at an all-in Interest rate/charge of 9 per cent per annum.
Mr. Okorafor, therefore, advocated for a total compliance with the guidelines by stakeholders and also highlighted the eligibility criteria for participation in the facility/CP programme, as well as the responsibilities of the stakeholders; just as he reiterated the CBN’s determination towards the encouragement of projects that will further enhance Nigeria’s import substitution strategies.
No comments yet. Be the first to post comment.