CBN unveils business loans at 5% (N5m individuals, N25m corporate) for graduates, undergraduates  

The Central Bank of Nigeria (CBN) as part of its policy measures to address rising youth unemployment and underemployment, has unveiled business loans for graduates and undergraduates of Nigerian polytechnics and universities at a single digit interest rate of 5%.

The business loans which comprises N5million for individual projects and N20million for partnership and company’s projects are designated the Tertiary Institutions Entrepreneurship Scheme (TIES), and executed in partnership with Nigerian polytechnics and universities to harness the potential of graduate entrepreneurs (gradpreneurs) in Nigeria.

CBN Unveils Business Loans For Graduates, Undergraduates To Fight Unemployment

According to the Apex Bank, the Business Loans Scheme is designed to create a paradigm shift among undergraduates and graduates from the pursuit of white-collar jobs to a culture of entrepreneurship development for economic development and job creation. It also aims to provide an innovative financing model that will create jobs, enhance the entrepreneurial ecosystem and support economic growth and development.

According to a report the CBN released on Wednesday titled: “Guidelines for the Implementation of Tertiary Institutions Entrepreneurship Scheme’, (TIES), it says the broad objective of the Scheme is to enhance access to finance by undergraduates and graduates of polytechnics and universities in Nigeria with innovative entrepreneurial and technological ideas.

The Apex Bank gives other specific objectives of the Business Loans as follows

i. The Business loans is to provide an enabling environment for co-creation, mentorship and development of entrepreneurial and technological innovations;

ii. Fast track ideation, creation and acceleration of a culture of innovationdriven entrepreneurship skills among graduates of polytechnics and universities in Nigeria;

iii. Promote gender balance in entrepreneurship development through capacity development and improved access to finance;

iv. Leapfrog entrepreneurial capacity of undergraduates and graduates for entrepreneurship and economic development in partnership with academia and industry practitioners; and

v. Boost contribution of non-oil sector to the nation’s GDP

The report states that the interest rate will be 5 per cent per annum and nine per cent effective from March 1, 2022 or as may be prescribed by the CBN.

It noted that priority would be given to innovative entrepreneurial activities with high potential for export, job creation and transformational impact.

Eligibility Criteria for Participation In The Business Loans Scheme

Applicants under the Scheme shall be graduates of Nigerian polytechnics and
universities with:
i. First degree certificate (BSc/HND/ or its equivalent);
ii. National Youth Service Certificate (NYSC) discharge or exemption
certificate;
iii. Certificate of Participation issued by polytechnics and universities
evidencing entrepreneurship training; and
iv. Not more than 7 years post-NYSC.

Tiers of Business Loans On Offer

Tier 1 – Individual projects

Loan Limit: N5.0
million

Tenor: 5 years

Interest Rate: 5% per annum (9%) effective from March 1, 2022 or as may be prescribed by the CBN)

Moratorium:
Maximum of 12 months on principal and interest

Documentation Requirements

▪ The applicant shall apply as a business entity registered with the Corporate
Affairs Commission
(CAC) and certified true copies (CTC) of relevant forms
submitted;

▪ Bank Verification
Number (BVN);

▪ First degree certificate (BSc/HND or its equivalent);

▪ National Youth Service Certificate (NYSC) discharge or
exemption certificate; and

▪ Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training.

Special Business Loans Offers

Tier 1 – Individual projects

Loan Limit: N5.0
million

Tenor: 5 years

Interest Rate: 5% per annum (9%) effective from March 1, 2022 or as may be prescribed by the CBN)

Moratorium:
Maximum of 12 months on principal and interest

Documentation Requirements for business loans scheme
▪ The applicant  shall apply as a business entity registered with the Corporate
Affairs Commission
(CAC) and certified true copies (CTC) of relevant forms
submitted;

▪ Bank Verification
Number (BVN);

▪ First degree certificate (BSc/HND or its equivalent);

▪ National Youth Service Certificate (NYSC) discharge or
exemption certificate; and

▪ Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training.

Tier 2 – Partnership / Company projects

Loan Limit: N25.0 million

Tenor: 5 years

Interest Rate: 5% per annum (9% effective from March 1, 2022 or as may be prescribed by the CBN)

Moratorium: Maximum of 12 months on principal and interest.

Types of Business Eligible for Participation

Businesses eligible to be covered under the Scheme shall include innovative start-ups and existing businesses owned by graduates of Nigerian polytechnics and universities in the following areas:

i. Agribusiness – production, processing, storage and logistics;

ii. Information technology – application/software development, business process outsourcing, robotics, data management;

iii. Creative industry – entertainment, artwork, publishing, culinary/event management, fashion, photography, beauty/cosmetics;

iv. Science and technology – medical innovation, robotics, ticketing
systems, traffic systems, renewable energy, waste management.

Documentation Requirements for the Business loans scheme
The applicant shall apply as a business entity registered with the Corporate
Affairs Commission (CAC) and certified true copies (CTC) of relevant forms
submitted;

▪ Bank Verification Number (BVN);
▪ First degree certificate (BSc/HND or its equivalent);
▪ National Youth Service Certificate (NYSC) discharge or exemption certificate;  and Certificate of
Participation issued by polytechnics and universities evidencing entrepreneurship training.

How To Apply for the Special Business Loans

The beneficiary must apply on the dedicated online portal and provide all requisite documentation to support the application, the CBN document says.

i. Apply on the dedicated online portal and provide all requisite documentation to support the application;

ii. Present for verification original copies of submitted certificates and documents;

iv. Adhere strictly to the terms and conditions of the Scheme and avoid any forms of plagiarism in the project idea;

v. Utilize the funds for the purpose for which it was granted;

vi. Present the business and its location for mapping/tagging, as well as monitoring and evaluation;

vii. Maintain accurate and up-to-date records available for inspection/verification by the CBN and Monitoring Team; and

viii. Adhere strictly to the terms and conditions of the Scheme.

Repayment
Interest payment and principal repayment shall be made on monthly or quarterly basis by the beneficiary depending on the established cash flow cycle and in line with the approved repayment schedule.