CBN Sets N10bn Capital Base for Credit Guarantee Companies

The Central Bank of Nigeria yesterday pegged at N10 billion the minimum paid-up capital for the establishment of the proposed Credit Guarantee Companies in the country. This was contained in a circular by the CBN titled, “Exposure Draft of Guidelines for Regulation and Supervision of Credit Guarantee Companies in Nigeria,” dated August 4, 2021, and addressed to banks, other financial institutions and stakeholders.

In addition to the minimum capital base, a CGC is also required to pay a non-refundable application fee of N100, 000, non-refundable licencing fee of N1 million, and change of name fee of N50, 000. According to the apex bank, the proposed credit risks guarantee firms are expected to provide third-party credit risk mitigation to lenders through the absorption of a portion of the lender’s losses on the loans made to Nigeria-based MSMEs in case of default.

While the provisions of the guidelines shall apply to CGCs licenced by the CBN, the PFIs shall comply with same provisions as it relates to their activities, the CBN added. The CBN also stated that the cumulative guarantee liabilities of a CGC shall not exceed 10 times of its shareholders’ fund unimpaired by losses. It stressed that the CGCs shall commence operations with, and maintain at all times, a minimum paid-up capital of N10 billion or such amount as may be prescribed by the CBN from time to time.

However, CBN, among other things, barred the CGCs from provision of guarantee to MSMEs based outside Nigeria. The bank also forbade them from accepting demand, savings and time deposits or any other deposits, including provision of credit to customers.

Fulani herdsmen terrorist are kidnapping My people in Enugu, Ebonyi and Abia state in Nigeria Please retweet this to create awareness, NIGERIA government is supporting and nothing has been done. My friends were kidnapped Please retweet this 😭😭😭

Ireland Ireland Latest News, Ireland Ireland Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Lagos Assembly approves full takeover of Lekki Concession Company | The Guardian Nigeria News - Nigeria and World NewsThe Lagos House of Assembly has approved Gov. Babajide Sanwo-Olu’s request for the state to assume full ownership of Lekki Concession Company (LCC) Ltd, a privately owned company. They won't tell us how much they paid the former owner. Posterity will judge all these people. During fashola regime such statements was made LCC still remain but we don't know the work of devil
Source: GuardianNigeria - 🏆 1. / 94 Read more »