CBN unveils N200bn in loans for creatives
The Central Bank of Nigeria (CBN) as well as other banks have started the disbursement of single-digit loans to companies in the creative industries in Nigeria to boost the sector.
The move was made known at a media briefing held in Lagos recently under the aegis of the Bankers’ Committee.
The CBN’s decision came after calls for such a move at the Creative Nigeria Summit that took place on July 16 and 17, 2018. The event brought together thought leaders, industry experts and renowned professionals within the film industry to discuss issues affecting the industry.
Its aim, as stated by Taiwo Olukunle, MD of event organiser Think Tank Media & Advertising, was “to build a structure that leaves a sustainable legacy and put proper structures in place to develop the creative industry and diversify the Nigerian economy.”
Based on this, Ahmed Abdullahi, director of the banking supervision department at the CBN, has decided the economy and lending to the private sector has improved due to the high record of foreign portfolio inflows (FPIs) of US$6 billion in the first quarter of 2019.
Group MD and CEO of Access Bank, Herbert Wigwe said: “At the Bankers’ Committee, we got the approval to take it to the next level, which is simply to do a final presentation and share it with the market. So by next week there will be an announcement for people who want to participate in each of these segments.
“The specific amount will depend on which of the strata you fall into and what you are doing. The loans are for a maximum of 10 years, they are single-digit interest rate loans and reflective of the fact that in these industries, what you require is long-term financing at single digits; while we will ask for collateral it will be flexible.”
Kennedy Uzoka, MD of the United Bank for Africa (UBA), was of the opinion that something needed to be done for Nigeria to diversify its economy from the standpoint of exports.
“We interrogated this and worked with the different agencies of government across the continent and also we came back home to check what they have. We found out that indeed we have a lot of policies, but the challenge has been executed and we narrowed this down to seven broad areas.
“Typically, finance is one of the major challenges; we have policies, logistics – our ports don’t open on weekends – and in terms of the policies that drive exports, we believe that a lot of them need to be changed.
He added: “Fortunately, the CBN has different types of funds, so we looked at the existing funds so we don’t reinvent the wheel and so we looked at which of the funding can address the current challenges.
“Based on the meeting we had, we are going to be lending at single-digit, up to a maximum of 10 years and we are going to devote N200 billion (US$556m) to support this. That will change the narrative for export,” Kennedy said. It was concluded that this loan will help in the creation of over 300,000 jobs in the creative industry.