BoI disburses N57 million loan to 13 entrepreneurs in Kogi

.Seeks N750m matching fund balance from governor

THE Bank of Industry (BoI) has disbursed N57.24million to 13 Micro, Small and Medium Enterprises (MSMEs) in Kogi State as part of its renewed drive to boost the nation’s manufacturing sector.  

  The disbursed fund, under the Kogi State-Bank of Industry N2 billion MSMEs development fund scheme, is expected to boost business expansion and  enhance production capacity of the beneficiaries.

  Already, three Small and Medium Enterprises and nine micro enterprises from the state had secured of N130.27 million from the loan scheme.

  The development bank and Kogi State government had on the 19th of May, 2009, entered into a pact for a N2 billion MSMEs development fund to drive the industrial and economic development of the state.

  The scheme was essentially designed for the promotion of small and medium industries as a vehicle for rapid industrialisation, sustainable economic development poverty alleviation and high employment generation in Kogi State.

  Under the MoU, Kogi State was required  to pay 1 billion and it is expected to be matched in like sum by BoI.

  However, six years after the consolidation of the deal, Kogi State government has only been able to pay the N250 million first tranche of the fund, a situation which compelled the bank to demand the payment of the outstanding N750million.

  Speaking while giving out the cheques to the beneficiaries in Lokoja, last week, the BoI Managing Director,  Rasheed Olaoluwa, urged the state governor to pay the second tranche of the loan agreement so that entrepreneurs in the state would benefit from the low cost funding.

  Olaoluwa, who was represented at the occasion by the Executive Director, Small and Medium Enterprises(SMEs),  Rasheed Olagunju, noted that proper  funding would enable current and potential entrepreneurs in Kogi State benefit from the bank’s ongoing efforts at creating a favourable platform  for MSMEs in Nigeria.

  He listed some of the new initiatives of the bank, which are geared towards promoting small businesses in the country, to include creation  of a full-fledged Directorate in charge of SMEs; appointment of 122 Business Development Service Providers (BDSPs) in three categories, that is state, zonal and national levels; and entering into partnership with 10 SME-friendly banks to complement BoI’s lending, by providing working capital for our SME customers at a negotiated interest rate of monetary policy rate (MPR),  plus six per cent per annum.  

  In particular, Olaoluwa urged the state government to take advantage of the bank’s cluster-based product development initiatives.

  He added: “It is a well-known fact that Kogi State is richly endowed in agriculture, water resources and solid minerals. Some of the agricultural products include cassava, oil palm, cashew, cocoa, Yam, Rice, fish; while the solid minerals include iron ore, limestone, coal, among others. 

  “This has therefore created investment opportunities in agro-processing, iron and steel production, cement manufacturing, solid mineral beneficiation, water transportation, to mention but a few. The state also has huge tourism potential in view of its various pre-colonial relics as well as beautiful landscape and favourable weather conditions.

  “For the second phase of the programme, we would like to invite the State Government to key into BoI’s cluster-based product development initiative. By so doing, product clusters would be identified based on the comparative advantages of the various local government areas in the state and the enterprises in such locations will be financed under the matching fund scheme”.

  The Governor of Kogi State,  Idris Wada, described the occasion as a big milestone in the administration’s effort to industrialise, generate employment and stimulate the economy.  

  According to him, what has been constituting impediment against the development of SMEs, particularly in the state, is inadequate supply and cost of start- up capital.

  The Governor however stated that the state entered into the deal with the BOI to address the issue of finance, stressing that his administration was committed to the full realisation of the scheme.

  He added: “SMEs constitute a major vehicle for driving economy progressively. But what constitute a major impediment to the development of SMEs, especially in the state, are inadequate supply and cost of start- up capital among other major problems.  To address this problem, the state government went into collaboration with the Bank of Industry and initiated this joint fund scheme to provide MSMEs entrepreneurs in the state the opportunity to access to loan.”

  Responding on behalf of other beneficiaries, Salami Abraham of Savidigam Enterprises, producer of poultry feeds, thanked BoI and Kogi State government for facilitating access to the loan.

  He noted that the loan would enable him and his other colleagues to expand their production base and generate more employment for the teeming youths in the state.