From Tony John, Port Harcourt
The Nigerian Content Development and Monitoring Board (NCDMB) and Nigerian Export Import Bank (NEXIM) have disbursed about $42 million to Small and Medium Enterprises (SMEs) to boost their participation in the oil and gas sector.
The Head, Specialised Business at NEXIM, Muhammed Awami, disclosed this at the NCDMB stakeholders’ sensitization and engagement forum in Port Harcourt, Rivers State yesterday.
He said that although the working capital of Capacity Fund is $30 million, they have exceeded the amount in order to attract more Nigerian players in the oil and gas sector.
The programme theme “Deepening Local Content through Certification, Compliance and Financing Support” brought together key players in the oil and gas industry to discuss the involvement of Nigerian players.
Awami appealed to the duly registered Nigerian oil service providers with viable contracts with International Oil Companies (IOCs) and National Oil Companies (NOCs) to take advantage of the NCDMB Working Capital and Capacity Fund, managed by NEXIM bank.
He said the fund offers flexible financing and tailored solutions to meet their business needs, and catalyses business growth, helps to access markets, expand global footprint and unlock new opportunities.
“Once you meet pre-disbursement conditions, we disburse the funds to you, and after disbursement, we also monitor sometimes jointly with NCDMB. Sometimes, we just do spot check assessment of utilization of the funds, to make sure the funds are being utilised for the purpose it was disbursed.
“When it’s time to repay, we expect that repayments are made by the beneficiaries so that we can also lend again to other people. The fund Working Capital and Capacity Fund is $30 million. But, so far, we have disbursed about $42 million.
“So, I’m sure a lot of challenges could be around collateral in terms of how the funds operate. So, what we have done is to water down the requirements without compromising the bank or the board. So, we use things like the assignments of receivables; we use things like insurance and other forms of collateral which make it easy for the beneficiaries to access the funds, though we are transactional about it. So, we look at the transaction itself and build the finance structures around the transaction in such a way that the loan becomes self liquidity without the need for physical collateral.”
Earlier, the Executive Secretary of NCDMB, Felix Ogbe, said the forum offers the board an opportunity to deliberate with the stakeholders in the oil and gas industry.
Represented by Osa Uchendu, Ogbe said the conversation would boost more participation of Nigerian players in the oil and gas industry and encourage their business growth.
Also speaking, the Group Head, Oil and Gas, in the Bank of Industry, Gabriel Yemidale, said the Nigerian Content Intervention Fund (NCIFund) which started in 2017, with N200 million had grown to N300 million in 2023.
He said: “Most times, I see a lot of people come to the bank to apply for loans. Some of them are not veritable for this loan; they are not contributing the one percent. I want to really emphasise on this, that you have to be a contributor to this fund, you have to pay that one percent NCD which they take from your contract, that you have with the IOCs.
“We have five funds, the community financing which is now being done with the PFIs, and one of the PFIs, we have given it to FCMB, and why I’m starting with that is because this is the baby of the current Executive Secretary of NCDMB, and he wants to touch the lives of the grassroots, he wants to grow that market, that segment and make them start playing where the foreign players are, which is the life enterprise space.
“So, we started that funds with FCMB, and the single obligor is N100 million for starters, we will continue to review it as time goes on, and moratorium on that is 3 to 6 months, and it’s depending on your needs, it’s about two years, all you need to do, go to NCDMB with your ISPO, go with your contract and the loan will be issue to you.”
Yemidale explained that there is no bank guarantee for community finance, “it is just the ISPO, from the IOCs issuing you those PO, this fund is readily available for community people to utilise.”
Leave a comment