MARCH 11, 2013 By FRANKLIN ALLI
T
he Bank of Industry, BoI, has signaled that all is not well with the administration of the Federal Government’s N100 billion Cotton Textile and Garment (CTG) Industry loan to beneficiary companies. The bank is currently managing the fund at a loss under the current interest rate of six percent. This is even as majority of the Fund beneficiaries are not happy with the loan conditions and have called for a lower interest rate of three percent instead of the current six percent in order to reduce their production cost. An AIDE MEMOIRE prepared by the United Nations Industrial Development Organisation (UNIDO) and BoI made available to Financial Vanguard, showed that beneficiary firms include SunFlag, Adhama Textiles and Garment Industry Limited, Kano; Sam & Sarah; Nigeria Bag Manufacturing Company, BAGCO; Femi, a handbag and accessories manufacturing firm, among others. According to the document, BOI is finding it difficult to manage the Fund profitably. The bank has, therefore,
BOI managing N100bn CTG fund at high cost — Report •Seeks 3% coupon rate from DMO requested the Debt Management Office (DMO) to review downward its coupon rate for the fund being five percent to three percent as the bank is currently managing the Fund at a loss. It was learnt that the administrative and other ancillary costs are currently from outside the Fund and the expenses are being borne by BoI.
Findings on the administration of the Fund further revealed that although most of the beneficiary companies are satisfied with the bank’s loan application process and loan supervision, yet they are not satisfied with the disbursement plan and the conditions of the loan, claiming that the current amount disbursed is not enough to produce at full capacity.
Hence, reduction in the interest rate was considered the most desired change to the administration and conditions of the CTG Fund by beneficiary firms followed by extension of the loan duration. About 71 percent of the firms required a loan tenure beyond seven years to 20 years to enable the industry stabilise and grow. But the
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2,125.00
+61.00
18.76
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110.07
-1.08
91.23
-0.33
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