The Central Bank of Nigeria on Thursday released the guidelines for accessing the Real Sector Support Facility (RSSF) through Cash Reserve Requirements (CRR) and Corporate Bonds (CBs) aimed at channelling funds to the manufacturing and agricultural sector.
Under the guidelines, the maximum facility any bank could grant to any project in the real and agricultural sectors at a go is pegged at N10 billion at an interest rate of nine per cent per annum.
According to the apex bank, the new guidelines remain part of its measures aimed at increasing the flow of credit to the real and agricultural sectors of the economy and also sustain the nation’s economic recovery drive.
The CBN’s Acting Director of Corporate Communications, Mr Isaac Okorafor, stated that the Deposit Money Banks would henceforth be incentivised to direct affordable, long-term bank credit to the manufacturing, agriculture.
In addition to the manufacturing and agriculture sectors, other sectors considered under the new guidelines by the CBN as employment and growth-stimulating will also benefit from the long-term credit to be given at single digit interest rate.
Okorafor stated further that Corporate/Triple-A rated companies would be encouraged to issue long-term Corporate Bonds under the guidelines, adding that that a Corporate Bond Funding Programme has been put in place, involving investment by the apex bank and the public in Corporate Bonds issued by companies.
Stating further that the programme will be subject to the intensified transparency requirements for participating companies, the acting Director listed the requirements for the bond programme as including, publishing through printing of an Information Memorandum which would spell out the details of the projects for which the funds would be required.
In addition, the Memorandum will also provide the terms and conditions that would show that these are long-term ones that would generate employment and stimulate growth.
He stated: “The bank had put in place a programme under the Differentiated Cash Reserves Requirement Regime whereby the 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 Cash Reserves Requirements to finance the projects; subject to the DMBs providing verifiable evidence that the funds shall be directed at the approved projects by the CBN.
“The tenor for the differentiated CRR would be a minimum of seven years with a two-year moratorium.
For the Corporate Bonds programme, the tenor and the moratorium would be specified in the prospectus by the issuing corporate”, Okorofar added.
The apex bank charged all operators and stakeholders to ensure strict compliance with the guidelines in view of its import substitution and other benefits to the nation’s economy.