In recent times, businesses and people have had to ask for financial help to get their operations and daily lives together. All – or most of it – is due to the fact that the country is stuck in some sort of depression/economic recession. The CBN non-interest loan allows individuals and businesses to obtain loans without interest, easing economic hardship as a result.
Copied by climate change and food insecurity citizens and businesses need credit facilities to help keep their heads above water and help them thrive through this dark storm. There comes the justification for the need to access credit facilities that will help with minimal or no interest.
What is a non-interest Loan?
Non-interest loans are loans that allow you the opportunity to borrow funds without paying interest. These loans only allow you to pay the amount you borrowed only.
Many people might be surprised that these kinds of loans exist in a financially challenging terrain like Nigeria, but they do exist and are a part of our financial system.
What the CBN non-interest loan is all about?
The country’s apex bank, the Central Bank of Nigeria (CBN) partnered up with the Nigeria Incentive-Based Risk Sharing system for Agricultural Lending, (NISRAL) Micro Finance Bank to make these loans available for Small and Medium Scale Enterprises (SMEs), Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS) and households.
The loan scheme was basically a relief fund brought up as an avenue to help citizens, entrepreneurs and businesses get back on their feet after the financial aftermath of the covid-19 pandemic.
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How much can the CBN non-interest loan borrow me?
For the Non-Interest Target Credit Facility aimed at assisting Nigerian households and Micro, Small and Medium Scale enterprises; the CBN non-interest loan can offer entrepreneurs and business loans to the tune of N2.5 million. These loans come at a three years tenure with a 6-month grace (moratorium) period which helps one delay in the payment till things balance up a bit.
For the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS) Non-Interest loan aimed at promoting agricultural business in the country, providing economic development and job opportunities; funds up to N10 million is made available. The AGSMEIS-N loan gives the borrower 7 years tenure of repayment depending on the nature of the project to be executed. Applicants also enjoy a 6 month grace (moratorium) period to help them balance things out before beginning to repay the loan.
If one cannot afford to take the AGSMEIS path, a non-interest alternative fashioned after the Islamic principles of finance including Murabaha and Ijarah will be made available.
These options help the borrower grow his business, finance raw materials, and equipment and get working capital.
How can one apply for a CBN non-interest loan?
In the event that one wants to partake in this scheme, here are a few steps one needs to take:
- Log on to the NISRAL microfinance website.
- Click on the “Apply for Non-interest Facility” two options will be provided. The “Non-Interest TCF” and “None-interest AGSMEIS”.
- Click on the Non-Interest TCF. Another set of options will appear including household facility and SME facility. Pick the option that best satisfies your needs.
- Take note of the prompt that asks you if you are a new or returning applicant. Select the “New Applicant” option if it is your first time on the platform.
- You will be taken to a page where you will be asked to input your Bank Verification Number (BVN), fill it in and other required fields.
You would be greeted with a congratulatory message if your application was successful. For businesses registered under the Corporate Affairs Commission, your best bet is to opt for the SME facility. All you need to do is to fill in your business Taxpayer Identification Number (TIN) and other information requested by the page.
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On a final note
Though this loan may seem like a dream come true, one must ensure that one puts caution or else, it might drive one into borrowing so much more than he can actually pay back, forcing one into financial hardship.
Also, though these loans do not charge interest, you could be up to pay retroactive interest going back to the day you took the loan if you do not repay the loan as of the time due.
If you do take the loan, make sure you pay attention to the terms and conditions and make it a must to make every payment fully and on time.
