OLAJIDE FABAMISE writes on the Bank of Industry (BoI’s) new financing scheme aimed at improving the capacity of operators in the nation’s leather products manufacturing sector. The intervention is expected to intensify import substitution in the country.
Since its inception, the Bank of Industry (BOI) has been providing the needed oxygen for the nation’s small and medium enterprises through its various intervention funds. The bank has been commended for its many achievements which stakeholders believe has made so much impact in the Nigeria’s industrial landscape.
The BoI has disbursed N83.5 billion to over 776 enterprises which generated almost 400,000 direct and indirect jobs, a feat no agency of government has been able to achieve so far.
Not relenting, the Bank, as part of efforts to intensify import substitution, especially those in Aba cluster of Abia state, recently unveiled the Aba Finished Leather Goods Cluster Financing programme, targeted at over 150,000 artisans in the cluster.
According to BoI, the initiative is a sustainable lending scheme to members of the Leather Products Manufacturers Association of Abia State (LEPMAAS). The bank states that through the financing programme, beneficiaries will access up to N300, 000 for the procurement of materials for expansion which is expected to improve production and further boost import substitution.
The scheme, according to BoI, is a collaboration with Fidelity Bank Plc, where qualified members of LEPMAAS will be given short term loans with maximum obligor limits of N300, 000 – N500, 000. It also states that the intention is to disburse (through Fidelity Bank) up to N400million every quarter to about 300 new target beneficiaries who will be members of the cluster.
Fidelity Bank in a presentation states that, ‘‘essentially, under this scheme, Fidelity Bank Plc will serve as partner commercial bank. Fidelity will open SME bank accounts for members of LEPMAAS to access the loans. In this respect, we have done the following so far: Financed the construction and set-up of an ultra-modern and fully equipped secretariat for LEPMAAS.
‘‘To support the planned close monitoring of loans under the programme by BOI, we provided a tailored zero-cost current account platform for members of LEPMAAS who will be beneficiaries of the planned loans from BOI. As we are all aware, Aba is an entrepreneurial hub not only in Nigeria but in the entire West African sub-region. Entrepreneurial activities in Aba revolve mainly around finished leather goods and of course, garment works. Overtime, activities here have evolved into business clusters as entrepreneurs look to build synergy with like businesses and linkages with consumers and support institutions. No doubt, such synergies gave birth to the Leather Products Manufacturers Association of Abia State (LEPMAAS) and this has enhanced the enterprise competitiveness of SMEs in the cluster through the realisation of the benefits of economies of scale that have been superbly driven by the coming together of entrepreneurs in the cluster to further their common interests
‘‘Indeed, the Aba finished leather products cluster has grown in stature over the years. As at today, LEPMAAS, the umbrella association for the cluster has over 70,000 artisans; 4 clusters (shoe, trunk box, belt and bag); 14 administrative zones; 284 lines. It caters to both the domestic market and markets outside Nigeria especially those along the West African Coast (i.e. Togo, Burkina Faso, Ghana, Senegal, the Gambia, Mali, Cameroun etc.)
‘‘Our desire is to make products from this cluster global brands. It is in furtherance of our commitment towards building the next generation of global entrepreneurs in the art of leather products manufacturing that our bank has gone into this collaboration with BOI to support entrepreneurs in this cluster.’’
Speaking at the unveiling of the financing initiative in Aba, recently, minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, said the launch of the Aba finished goods cluster financing programme has essentially addressed some of the challenges of MSME financing.
Enelamah, who was represented by the ministry’s permanent secretary, Edet Akpan, said the Aba leather cluster has been in existence for many years with trade passed on from one generation to another, and can be considered to be one of the oldest and most successful trade clusters in the history of Nigeria.
According to him, the annual production capacity of shoes alone in Aba leather cluster is estimated at about six million with the products sold in local as well as neighbouring West African market. He also said machines have also been acquired to enhance capacity both in quality and quantity. He therefore urged beneficiaries of the financing scheme to ensure that loans are repaid to drive sustainability of the financing programme.
The minister further explained that, ‘‘Ministries, Department and Agencies recently engaged key players in the leather sector in finalising the leather and leather product policy. Also, the leather product featured prominently in the focus labs currently being implemented by the federal government under the government policy of economic recovery and growth plan programme.
‘‘To upgrade the quality and quantity of leather products in Abia State, the federal ministry of industry, trade and investment, ensured the acquisition of some machineries and equipment that will be put into use in Abia. The facilities are expected to be managed on a public-private partnership.’’
In his speech at the event, managing director of BoI, Olukayode Pitan, said. ‘‘The programme is a bouquet of financial and non-financial services and it is being implemented alongside two strategic partners – Ford Foundation and Fidelity Bank Plc. These two institutions have supported the Bank in great measure in executing a well-rounded product that specifically speaks to the financial and capacity development needs of the members and executives of LEPMAAS.’’
He also explained that finished leather products to which LEPMAAS is a significant contributor, accounts for over 80 per cent of the textile apparel and footwear component of the manufacturing sector while informal computations put yearly revenue from the cluster at over N10billion despite the competing volumes of similar goods being imported.
Pitan said that BOI will continue to focus on the growth and development of the Aba Finished Leather Goods cluster, through initiatives that promote the made in Aba brand both locally and globally.
He said, ‘‘we remain a growth catalyst that seeks to further economic development in Nigeria in general and in Aba in particular. By providing low interest, non-collaterised loans, the Bank have provided flexibility for qualified members of LEPMAAS recommended by their line and zonal chairmen to access up to N300, 000 towards the procurement of materials to expand and improve their production activities.
“The programme is being implemented alongside Ford Foundation and Fidelity Bank Plc. The Foundation will be providing a grant that specifically focuses on strengthening the capacities of the leaders and beneficiaries even as monitoring structures to ensure loan repayments are instituted. Fidelity Bank will provide account management services to the loan beneficiaries.
‘‘It was this significant opportunity to substitute import volumes by supporting quality improvement of Made in Aba products, create additional jobs and improve the qualities of lives of the artisans that led the Bank of Industry to design this tailored programme.
‘‘This programme has been designed based on the previous activities of the Market Development in the Niger Delta (MADE) initiative of the Department for International Development (DFID) in developing the capacity and governance of LEPMAAS. The structures put in place by MADE provide the platform for the successful execution of this cluster financing programme.’’
Pitan, who assured that BOI will continue to focus on the growth and development of the Aba Finished Leather Goods cluster, through initiatives that promote the Made in Aba brand both locally and globally, thanked Enelamah, and governor of Abia State, Dr Okezie Ikpeazu for their supports in the actualisation of the programme.
Ford Foundation regional director, Innocent Chukwuma, said the partnership with BoI was part of efforts to fulfill its commitment to leather manufacturers to encourage local production and increase campaign for adoption of made-in-Aba.
To this end, Chukwuma said the Foundation would be staking a grant of $150,000 in the programme to drive social impact and enhance productivity.
Managing director/chief executive officer of Fidelity Bank, Nnamdi Okonkwo, said the partnership with BoI on the scheme is in furtherance of the bank’s commitment towards building the next generation of global entrepreneurs in the art of leather products manufacturing in the cluster.
Okonkwo said that the bank is committed towards building the next generation of global entrepreneurs in the art of leather products manufacturing that the bank has gone into this collaboration with BOI to support entrepreneurs in this cluster.
- NEWS22 hours ago
I’m Contesting Against Billboards In Nasarawa – Maku
- NEWS22 hours ago
Over 20,000 APC Members Defect To PDP In A/Ibom
- POLITICS9 hours ago
2019: I’ll Never Support, Campaign For APC’s Candidate – Comm. Minister
- NEWS11 hours ago
2019: Court Upholds Election Of Alhaji Muhammad Imam As PDP Guber Candidate
- INTERVIEWS22 hours ago
PDP Must Realise Nigeria Is Not For Sale –Sen Ndume
- FEATURES53 mins ago
2019: Is Amosun Repeating History Of Ogun 2011 Gov’ship Race?
- NEWS22 hours ago
Senator Adamu Calls For Prayers Ahead Of 2019 Polls
- NEWS22 hours ago
We’re Not Part Of Atiku’s Endorsement – MAJA Party