The
Bank of Industry has unveiled plans to support 1,000 Small and Medium
Enterprises that are involved in processing of agricultural products in Nigeria
with N5bn.
A statement on Friday
stated that the finance under the Cottage Agro Processing Fund would provide
loans to entrepreneurs to establish small scale plants or mini mills,
specifically to process products such as cassava, oil palm, paddy rice,
groundnut, yam, maize, sorghum, cocoa, sheanut, plantain, cashew, hides and
skin, meat, chicken and fish.
It stated that the
Managing Director of the Bank, Mr. Rasheed Olaoluwa, disclosed this at a
briefing in Lagos on Thursday, adding the loan facilities would be disbursed
with a nine per cent interest rate, and one per cent management fee.
According to the
statement, the BoI has identified a number of commercial banks known to be
SME-friendly as potential partners, adding that the loans would be disbursed
with easy-to-satisfy conditions.
Olaoluwa said, “We plan
to finance about 1,000 projects under this fund. We have identified the
priority products for each state and have assembled a number of partners for
the effective operation of this fund.
“The loans will be granted
at a single digit interest rate of nine per cent per annum and total management
fee of one per cent.”
Olaoluwa, however, stated
that certain conditions must be met for any business to be supported.
He said, “The projects
financed must be located very close to the source of the agricultural products
to be processed.
“The business plan must
address both the primary and secondary sources of energy to power the plant,
and the equipment suppliers must be accredited by the BoI and must provide a
performance bond, and enter into a maintenance agreement.”
Olaoluwa disclosed that
applicants for the funds could become beneficiaries within two to four weeks,
if they had appropriate and suitable business plan.
The bank’s MD further
said that some business development service firms had been identified to help
the potential beneficiaries package project models that could meet the BoI
standard.
It noted that the N5bn
CAP Fund came shortly after a N3.4bn Cassava Bread Fund was disbursed by the
bank to finance the establishment of 41 processing plants for high quality
cassava flour.
Olaoluwa who disclosed
that the current N5bn CAP Fund would transit to a second phase after its
completion in five years time.
“We are also working with
the Federal Ministry of Agriculture on a N13bn Rice Intervention Fund to
establish 10 integrated rice mills and six cassava processing mills across the
country,” he said.
According to the BoI
boss, who drew examples from Ethiopia and Kenya, the CAP Fund aims to raise the
value of Nigerian agricultural products in the international market.
He said, “In Ethiopia,
10,000 pairs of shoes come out of Huajian Shoe Factory in the country everyday,
and are sold by the biggest name in fashion. Ethiopian shoes under AGOA was
nearly $7m in 2012.
“Similarly, if you fly
British Airways, you must have been served ‘Out of Africa’ nuts on board. Those
nuts are produced in Kenya and the Kenya nuts company employs more than 2,500
skilled personnel.
“In Nigeria, we have both
leather and cashew nuts in abundance and there is no reason we cannot and
should not displace these two countries,” he said.
Moreover, it added that
the bank was looking at how it could use the CAP Fund to maximise some
indigenous technologies, stating that they had some arrangements with the
Federal Institute for Industry Research in this regard…[culled from Punch]
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