BARBARA BAKO, Abuja.
The Central Bank of Nigeria has released fresh guidelines in which it pegs credit to real and agricultural sectors at 9 percent in a move to increase inflow to the economy and preserve the nation’s recovery.
Under the new rules, the CBN also allow a minimum tenor of seven years with a two-year moratorium for Differentiated Cash Reserves Requirement (DCRR) Regime
The Acting Director of Corporate Communications, CBN, Mr. Isaac Okorafor on Thursday in a statement issued in Abuja said that the apex bank had hope to achieve the flow of credit to the real sector of the economy as deposit money banks (DMBs) would henceforth be incentivized 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.
This new guidelines by the apex bank is the implementation of the outcome of last week bankers committee meeting where the operators resolved to open their cash reserves at the CBN to improve funding to both the agric and manufacturing sectors. Under the new rules, 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.
He further disclosed that the CBN 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.
For the Corporate Bonds (CBs) Programme, he said the tenor and the moratorium would be specified in the prospectus by the issuing corporate. He added that the maximum facility shall be N10 bn 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.
Comments are closed.