The Central Bank of Nigeria as a proactive measure to cushion the impact of COVID-19 pandemic, introduced a N100 Billion credit support for the Healthcare industry. The scheme is supposed to provide credit facilities to pharmaceutical and other Healthcare organizations intending to build or expand their capacity.
OBJECTIVES OF THE CREDIT SUPPORT
- Reduce medical tourism to conserve foreign exchange
- Provide long term, low cost finance for healthcare infrastructure development that would lead to the evolvement of world-class healthcare facilities in Nigeria.
- Improve access to affordable credit to support local production by pharmaceutical companies that will comply with the World Health Organization’s Good Manufacturing Practices (WHO GMP).
- Support provision of shared services through one-stop healthcare solutions to enhance competition and reduce cost of healthcare delivery in Nigeria.
ELIGIBILITY
- Healthcare product manufacturers
- Healthcare service providers and medical facilities
- Pharmaceutical and medical products distribution and logistics services
- Other human healthcare services providers as may be determined by CBN
ACTIVITIES COVERED
- Manufacturing pharmaceutical drugs, medical equipment and technology.
- Establishment and expansion of healthcare facilities.
- Supplying and distribution of medical and pharmaceutical drugs and equipment
- Medical and pharmaceutical research and development
- Other human healthcare value chain activity as may be determined by CBN
HOW THE SCHEME WORKS
The Scheme shall be funded by the Real Sector Support Facility-Differentiated Cash Reserves Requirement (RSSF-DCRR) of the CBN, and disbursements are made by Participating Financial Institutions (PFI’s). The eligible financial institutions are Deposit Money Banks (DMBs) and Development Finance Institutions (DFIs)
AVAILABLE LOAN TYPES
- Working capital: This is available to meet your short-term recurrent expenditure to keep the business growing. With a maximum tenure of 1 year, beneficiaries can access up to N500million (Five hundred million Naira only).
- Term Loan: This is a long term loan with maximum tenor of up to 10 years and access to loan amounts of up to N2billion (Two billion Naira only).
LOAN TENOR
The loan tenor depends on whether the loan was taken for funding working capital or if it is a term loan.
- For working capital, the tenor shall be for a period of up to 1 year, with an option for roll over for no more than 3 years.
- For a term loan, the tenor shall be up to 10 years with a maximum of 1year moratorium on repayment. Except for term loans for construction projects, the tenor of which shall be determined by the completion date.
LOAN REPAYMENT PROCEDURE
Repayment shall be broken down into interest and principal repayments which shall be paid in installments as provided by the PFIs. The PFIs shall remit the repayment to the Scheme every quarter.
COMMERCIAL BANKS REQUIREMENT
- Facility application letter
- Copy of company profile (to include details of company business operations, background of Directors and key Management)
- One-year statement of bank account(s) of the company for term loan and three-years bank statement for working capital (as it applies)
- Three years audited accounts of the company
- Copy of company registration/ incorporation documents:
- Certificate of Registration/ Incorporation
- Memorandum and Articles of Association
- Form CAC 2 (i.e allotment of shares)
- Form CAC 7 (i.e particulars of directors)
- Projected Cash flow
- Cash flow projections covering proposed tenor (with underlying assumptions)
- Details of collateral to be pledged under the facility
For more information, read CBN publication
https://www.cbn.gov.ng/Out/2020/FPRD/healthcareintervention.pdf
MedPau support Doctors and other Healthcare business owners in getting the CBN credit support.
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