In order to ease the impact of covid 19, the Central Bank of Nigeria through its official microfinance bank(NIRSAL) has released several stimulus packages including loans and grants for households, Farmers ad Small and medium enterprises(SMEs). While some of these loans are low-interest loans, Non-interest loans are another way to help facilitate the process of recovery both for families and businesses around the country.
Types of Non-Interest Loan offered by NIRSAL
There are two major loan options covered under the non-interest loan and they are;
- Non-interest TCF and
- Non-interest AGSMEIS
NIRSAL Microfinance Bank Non-interest Targeted Facility(TCF-NI)
The Non-Interest Targeted Credit Facility (TCF) is a stimulus package to support household and Micro, Small, and Medium Enterprises (MSMEs) affected by the COVID-19 pandemic. It is a non-interest term facility targeted at small businesses for the financing of key assets for their businesses.
In this financing opportunity, the limit is N2,500,000.00 for a period of 3 years with 6 months moratorium (a grace period before repayment starts).
The Non-interest TCF loan option is further divided into two options and they are;
- Household facility non-interest and
- SME facility non-interest
Just as their names imply, one is for households wishing to purchase a household item at a certain amount while the latter is for small and medium enterprises wishing to purchase a piece of equipment for their business at a certain amount and wish to get a loan to serve this purpose.
The maximum amount a household can request using this loan option is 500,000 Naira and this is usually paid directly to a vendor and the repayment period of 36 months is applicable here.
Applicants for SME non-interest can apply for a maximum 750, 000 and a repayment period of 36 months including the moratorium period mentioned above.
The Non-Interest Agri-Business, Small and Medium Enterprise Investment Scheme (AGSMEIS-NI) is a federal government intervention funding scheme through CBN that is intended to promote agricultural businesses to spur economic development and employment generation in the country.
The non-interest product is an alternative to the existing AGSMEIS program that is based on Islamic principles of financial transactions using products such as Murabaha and ijarah. It is a term financing specifically introduced for the financing of equipment, raw materials, and working capital.
The financing limit is N10,000,000.00 for a tenor of up to 7 years (depending on the nature/gestation period of the project). Applicants may in addition enjoy a moratorium of 6 months for mark-up and 18 months for the principal (a moratorium is a grace period granted to the customer by the Bank to postpone the payment).
Process of Application
The application process for each of these loan options is the same although there are slite differences based on the information and according to individual needs. However, they all follow these phases;
Phase 1: Application for FinancingApply for the TCF-NI facility by providing relevant personal information and the business to be financed.
Phase 2: Acceptance of Offer and other AgreementsYou will be notified when your application is approved and required to do the following:
- Generate the Offer Letter and accept it
- Generate the Undertaking to Buy Agreement and accept it
- Input the details of the items to be financed. This must conform with the approved amount as shown on your offer letter.
- You will finally attach invoices for all the items to be financed.
Phase 3: Taking delivery and Execution of Murabahah AgreementUpon fulfillment of Phase 2, wait for the disbursement of funds to the proposed vendor. The funds will be used to purchase equipment and raw materials from the vendor. Either NMFB or you as its agent will then be assigned to take delivery of the assets.
How to Apply for CBN NIRSAL Non-Interest Targeted Facility Loan
Interested Nigerians who wish to apply for the no-interest loan are to do so by completing their application form online via the NIRSAL Microfinance bank application portal at https://nibloans.nmfb.com.ng/nmfbloanapplicationportal
While on the portal, click on the Non-interest facility option, then select from the list of loans mentioned above then complete your application.