…unveils N5b cottage fund

By JIMOH BABATUNDE

Bank of Industry (BOI) has  disclosed that it is working with the Ministry of Agriculture on a N13billion Rice Intervention Fund for the establishment of  10 integrated rice mills and six cassava mills across the country.

The Bank explained that the objective of the Federal Government’s Agricultural Transformation Agenda is not only to increase crop production, but also to create value-added food processing industries as a means of reducing food imports.

The Managing Director , Bank of Industry, Rasheed Olaoluwa, who spoke at the launch of a N5billion’s Cottage Agro Processing Fund by the bank in Lagos last week, added that the bank is working with the Ministry of Agriculture in value addition.

He disclosed that BOI had in the past successfully implemented a N3.4billion Cassava Bread Fund designed by the Ministry of Agriculture to finance the establishment of 41 processing plants for High Quality Cassava Flour.

Rasheed Olaoluwa said that Agro processing is one of the four key sectors that have been identified as strategic under the Nigeria’s Industrial Revolution, noting that it has backward linkages with the primary agricultural sector.

He said  that agro-processing has multiplier effects in job creation, reduction of post-harvest losses and generating  better rural incomes, “ for instance,  a High Quality Cassava Flour processing Plant uses cassava as raw materials and supplies its products to Flour milling plants.”

COTTAGE AGRO FUND
Rasheed Olaoluwa said that the N5billion’s Cottage Agro Processing Fund   being launched by the bank will provide loans to beneficiaries to establish small scale plants or mini mills to process Nigeria’s agricultural products such as cassava, oil palm, paddy rice, groundnut, yam, maize, sorgum, cocoa and plantain among others.

He added that sheanut, cashew, hides and skin as well as chicken, meat and fish  will also be funded through the Cottage Agro Processing Fund.
“These products are grown all over the country and have been selected to ensure an even distribution across Nigeria’s 36 states.”

The Bank of Industry, according to the MD, plans to finance about 1,000 projects under the fund as they have identified the priority products for each state and have assembled a number of partners for the effective operation of the fund.

“The projects financed will be located very close to the source of the agricultural products to be processed. The business plan must address both primary and secondary sources of energy to power the plant.”

He added that the equipment supplier will be accredited by the bank and will be made to provide a performance bond as well as enter into a maintenance agreement.

While explaining that the fund size of N5b  is only a starting point, Rasheed Olaoluwa said the loan will be granted at a single digit interest rate of 9% per annum and a total management fees of 1%. “The tenor is five years with a moratorium of six months. We project that the Fund will help in creating a total of 20,000 direct and indirect jobs.”

The Managing Director of the bank said that existing operators in the sector as well as prospective young Nigerians who want to go into farming can take advantage of the fund to establish mini mills for processing agro products.