CBN Announces Commencement of N500bn Non-Oil Export Stimulation Facility

By March 16, 2018 Investment News

The Central Bank of Nigeria (CBN) on Thursday informed deposit money banks and development finance institution of the commencement of the Non-Oil Export Stimulation Facility (NESF).

NESF was introduced by the CBN to diversify the revenue base of the economy and to expedite the growth and development of the non-oil export sector.

The Facility will help redress the declining export financing and reposition the sector to increase its contribution to economic development.

In a circular issued signed by Hassan Mahmud, for director, financial policy and regulation department, the CBN told all participating financial institutions that the implementation of the NESF has commenced and that all inquiries to the fund shall be directed to the director, development finance department of the regulator.

The CBN had in October 2017 issued the guidelines for the facility where it stated the eligible transactions that shall qualify for funding under the NESF to include export of goods processed or manufactured in Nigeria; export of commodities and services, which are allowed under the laws of Nigeria, imports of plant and machinery, spare parts and packaging materials, required for export-oriented production that cannot be sourced locally; resuscitation, expansion, modernization and technology upgrade of non-oil export industries.

Under the lending limit, term loans under the Facility shall not exceed 70 percent of verifiable total cost of the project subject to a maximum of ₦5,000,000,000.

The guideline stated that the NESF shall have a tenor of up to 10 years and shall not exceed the 31st December 2027. Working capital/stocking facility shall be for one year with the option of roll-over once subject to the approval of the CBN. The Facility shall be granted at an all-inclusive interest rate of 9 percent per annum.

On the other hand, the CBN has also issued regulations on direct debit and bill payments. Direct debit is a cash-less form of financial settlement which facilitates recurring payments. It permits the originator of the instruction, known as’’ Biller’’, to collect amounts due from a payer through the Payer’s bank by leveraging an instruction or mandate provided by the payer. An entity wishing to participate as a Biller in the Direct Debit scheme will typically contact its bank or payment service provider.

The objective of the bill payments regulation is to document the minimum standards that must be complied with for the processing of bill payment transactions.

Source: BusinessDay