FG To Reduce Borrowing Cost For Manufacturers

By IAfrica
In Nigeria
Aug 30th, 2014

The federal government has concluded plans to reduce the cost of borrowing from banks for manufacturers.

This is aim at deepening the economy and reducing the unemployment level in the country.

Speaking at the 42nd annual general meeting of the Manufacturers Association of Nigeria (MAN), minister of industry, trade and investment, Dr. Olusegun Aganga, said that the government had put structures in place to reduce the cost of borrowing for manufacturers.

“I am glad to inform you that as part of the Nigeria Industrial Revolution Programme (NIRP), we have put together our nation’s first comprehensive real sector funding intervention under a programme called the “Financing Value Chain Initiative,” Aganga said.

“This initiative will address the structural and specific issues that have made it difficult to raise affordable funds in Nigeria. Through this, we will bring down the cost of borrowing for manufacturers, extend loan repayment periods, and provide access to new sources of capital for the Industrial sector. We are convinced that when fully implemented, the “Financing Value Chain Initiative” will provide affordable, long term funding, on reasonable terms, to both large and small businesses in Nigeria,” he added.

The out-going MAN president, Chief Kola Jamodu, said appropriate manufacturing financing was a necessary tool for the industrialisation of the country and stressed that access to funds was a major challenge to manufacturers especially small and medium enterprises.

He said traditional money deposit banks do not have enough space for manufacturers as their funding facilities are mostly of short term nature, and urged government to fast track the recently set up development finance institution initiative.

Jamodu noted that the federal government needs to recapitalise the Bank of Industry and use it more effectively to ensure that the needed financing of the manufacturing industry was met.

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