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Published On: Tue, Aug 19th, 2014

N220bn MSME Fund: CBN warns against repayment default

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CBN bars banksBy Etuka Sunday

The Central Bank of Nigeria (CBN) has issued strong warning to potential beneficiaries of the N220 billion Micro, Small and Medium Enterprises (MSMEs) Fund against failure to repay the single digit

interest loan.

The apex bank governor, Godwin Emefiele, who gave the warning on Monday, at the 8th Annual MSMEs Finance Conference/Entrepreneurship Award, at the Sheraton Hotel and Towers, in Abuja, stated in clear terms that beneficiaries who would fail to pay back the loan would risk  being blacklisted and banned for life from obtaining future loans in any bank in the country.

 While saying that the nine digit interest rate loan would not come without collateral and biometrics taking, the CBN boss stated, “If you don’t pay back the money, your name will go into the data bank and you will be blacklisted, and no bank in the country will ever give you loan again in the future.

“We need to build people with good credit culture and we will not allow the money to be truncated,” adding that the loan did not amount to sharing of free money, but an avenue to access finance for the

economic development of the country, for which account must be rendered after all.

According to the CBN governor, 60 percent of the money would be solely accessed by women entrepreneurs, while the remaining 40 percent would go to other different potential beneficiary-groups in the country.

He fuhrther stated, however, that the CBN would not be directly involved in disbursing the loan to eligible would-be beneficiaries, stating that relevant micro finance banks and related finance

institutions, which have met CBN standards, were already saddled with such responsibility.

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