By Emmanuel Nduka
The Nigerian Content Development and Monitoring Board (NCDMB) on Wednesday signed a Memorandum of Understanding (Mou) with the Nigerian Export-Import (NEXIM) Bank on the administration of US$30million Working Capital Fund for Oil and Gas service companies.
At the signing ceremony of the MoU in Abuja, Executive Secretary of the NCDMB, Engr Simbi Wabote, said the initiative was conceived by the Board to support the operations of local oil companies against the adverse effects of the COVID-19 Pandemic, loss of contracts due to low oil price and to further ensure that the companies retain their personnel in employment.
“The scheme would cover loans for working capital support and capacity building, invoice discounting and capacity building, including acquisition of low-end equipment to service short-term contracts/service obligations,” the ES said.
Engr Wabote explained that the maximum amount that can be borrowed by a single obligor is US$1,000,000 or its Naira equivalent, while the tenor of the loan would be up to 12 months for Working Capital loans and up to three years for Capacity Building loans, with moratorium of up to 12 months.
“Our intervention with the Bank of Industry is very successful. We audit the process periodically and we have 98 percent compliance in terms of pay back of the loan by creditors.
“The applicable interest rate shall be 5 percent per annum all-in for Dollar-denominated loans and 8 percent all-in per annum for Naira-denominated loans and the rate shall be fixed throughout the tenor of the loan. Maximum processing time shall be 21 working days from the date the applicant has provided all required documentation,” he added.
He also confirmed that ”all applications for the fund shall be through the web and NEXIM shall develop and avail a dedicated portal to facilitate the process, with access given to designated NCDMB staff for monitoring and necessary functions”.
As highlighted by the Board, the Working Capital Scheme is one of the newly introduced products in the Nigerian Content Intervention Fund (NCI Fund) approved by the NCDMB Governing Council under the leadership of the Minister of State for Petroleum Resources, Chief Timipre Sylva.
According to the NCDMB boss, roll-out date for the fund is July 1, 2021.
