The Nigerian Content Development and Monitoring Board (NCDMB) has announced that 53 companies have so far accessed loans from its $300 million Nigerian Content Intervention Fund (NCIF) scheme.
This was disclosed by Mr Obinna Ofili, General Manager, Nigerian Content Development Fund and Treasury Management, NCDMB, at the 2021 Capacity Building Workshop for Media Stakeholders on Thursday in Abuja.
NewsBeatng reports that NCIF is a partnership between the NCDMB and the bank of Industry, to boost capacity development of Nigerian companies in the oil and gas sector.
The NCDMB boss announced that the Managed Fund scheme was introduced in 2017 with initial funding of $200 million but commenced fully in 2018 and increased to $300 million in 2020 (which translates to about N123 billion at N410/$1).
“The fund was being disbursed based on five Product Offerings, with each product having distinct features and single obligor limit,” Ofili said.
The products include Manufacturing Financing (maximum of $10 million); Asset Acquisition Financing (maximum of $10 million); Contract Financing (maximum of $5 million); Community Contractor Finance (maximum of N20 million) and Refinancing (maximum of $10 million).
Ofili also revealed that collateral for the loan comprised bank guarantee from an acceptable commercial bank to cover the loan amount, which could also be acceptable to BOI of legal mortgage covering twice the value of the loan and in an acceptable location, Treasury Bills, Federal Government bonds, tripartite domiciliation of Contract proceeds.
“Applicable interest rate is 8% all-in per annum for all products except Community Contractors, which is pegged at 5 per cent all-in per annum.
“However, NCDMB slashed the rate to 6 per cent per annum as palliative to loan beneficiaries to overcome the challenges arising from the COVID-19 pandemic and attendant economic melt-down.
“Maximum tenor of each facility is 5 years, with moratorium period of 12 months. However, NCDMB granted palliative tenor and moratorium extension of two years from April 2020 to March 2022.
He stated that the credit risk is borne 100% by BOI to ensure both prudent loan management and return of the lent funds, so that other qualifying stakeholders can benefit from financing their businesses under the Scheme as the Loan is restricted to qualifying Oil & Gas activities while both NCDMB and BOI officials conduct routine monitoring of projects and activities financed with the loan finance.