By Favour Nnabugwu
The Bank of Industry (BoI) in collaboration with Kogi State Government has disbursed N57.24m to 13 Micro, Small and Medium Enterprises (MSMEs) in the State.
The loan disbursed 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.
The scheme which is essentially designed for the promotion of small and medium industries as a vehicle for rapid industrilisation, sustainable economic development poverty alleviation and high employment generation in Kogi State.
Already, three Small and Medium Enterprises and 9 micro enterprises from the state had benefited the sum of N130.27m from the loan scheme.
Under the MoU, Kogi State is required to pay 1bn and it is expected to be matched in like sum by the BOI.
However, six years after the consolidation of the deal, Kogi State government has only been able to pay the first tranche of the fund which is N250million, a situation which compelled the bank to demand the payment of the outstanding N750million.
Speaking while giving out the cheques to the beneficiaries at the capital city, Lokoja, on Tuesday, the BOI Managing Director, Mr. Rasheed Olaoluwa, urged the state governor to pay the second tranche of the loan agreement so that entrepreneurs in the state would benefit from low cost funding.
The MD 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; i.e. State, Zonal and National, and entering into partnership with ten SME-Friendly banks to complement BOI’s lending by providing working capital for our SME customers at a negotiated interest rate of MPR+6% per annum.
In particular, Olaoluwa urged the state government to take advantage of the bank’s cluster-based product development initiatives.
On the imperative of the initiatives to the state, he said,”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, etc.; while the solid minerals include Iron Ore, Limestone, Coal, etc.
“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.
Also, the Executive Governor, Kogi State, Capt. Idris Wada, described the occasion as a big milestone in the administration’s effort to industrialise the generate employment and stimulate the economy.
According to him, “What constitute impediment against the development of SMEs, particularly in the state, is inadequate supply and cost of start up capital”.
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.
The Governor “To address this problem, the state goverment went into collaboration with the Bank of Industry and initiated this joint fund scheme to provide MSMEs enterepreinuers in the state the opportunity to access to loan.”
Responding on behalf of other beneficiaries, Mr. 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.