Nigeria’s Bank of
Industry has launched a N5 billion ($30.5 million) Cottage Agro Processing
(CAP) Fund which the bank’s Managing Director Rasheed Olaoluwa says will be
used to aid operators in the sector as well as assist prospective young
Nigerians who want to go into farming to establish mini mills for processing
agro products such as cassava, cashew, oil palm, rice paddy, and several
others.
The Bank
of Industry Limited (BOI) is Nigeria’s oldest and largest development financing
institution charged with providing financial assistance for the establishment
of large, medium and small projects; as well as expansion, diversification and
modernization of existing enterprises; and rehabilitation of ailing industries.
Reconstructed
in 2001 out of the Nigerian Industrial Development Bank (NIDB) Limited, the
BOI’s initial share capital of N50 billion ($305.3 million) was increased to
N250 billion ($1.5 billion) in order to put the bank in a better position to
address the nation’s rising economic profile in line with its mandate.
To
achieve this mandate, the BOI said it established the Cottage Agro-Processors
Fund to support the establishment of cottage agro processing plants that will
produce food products and raw materials for industries within and outside the
Staple Crop Processing Zones (SCPZs) across Nigeria.
Olaoluwa
stated that the bank was determined to increase the success rate of loan
applications especially from the SMEs, lamenting that a lot of applications to
the BOI don’t meet the required standard.
To
achieve the success of the SMEs, the MD explained that the CAP will be a direct
intervention fund by BOI, adding , “the only involvement by commercial banks
will be limited to what we called the SMEs friendly banks to able to
participate in the working capital components of the loan. The working capital
component is only 10 percent.
“We have
a list of commercial banks that we have identified; we had meetings with them and
they have agreed to. The SMEs stakeholders like NASME, have agreed with the
list of the banks and if those banks are interested in providing the 10 percent
working capita we will go ahead with them but if they are not, BOI is prepared
to do that directly”, he added.
The fund
is projected to achieve the supply and installation of equipment for an
estimated 1,000 (One thousand) cottage mills across the country. A minimum
number of 20-30 mills per state, including the Federal Capital Territory (FCT).
Projects must be located in the areas with comparative advantages in terms of
the available agricultural raw materials within each state. This is expected to
create a minimum of 5,000 direct and 15,000 indirect jobs for Nigerians: total
(20,000).
Richly
endowed with abundant agricultural resources, Nigeria however struggles with
limited capacity for processing and preservation results in huge losses and
wastage, a problem the BOI hopes to tackle with the fund.
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