There are hopes of a brighter future for owners of small and medium scale businesses in Nigeria, with the initiative of the Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian Export Import Bank (NEXIM) to support those of them who operate in the nation’s oil and gas sector, with about $42 million.
But only duly registered Nigerian oil service providers who have secured verifiable and viable contract with International Oil Companies (IOCs) and National Oil Companies (NOCs) would benefit from the facility, according to the Head, Specialized Business at NEXIM, Muhammed Z. Awami.
He made this known during the NCDMB stakeholders’ sensitization and engagement forum in Port Harcourt. The forum brought together key players in the oil and gas industry where issues around the involvement of Nigerian players in the sector were brought to the fore.
Awami said: “Once you meet pre-disbursement conditions, we disbursed 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 utilized for the purpose it was disbursed.
“When it’s time to repay, we expect that repayment 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 disburse 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.
“We look at the transaction itself and build the finances structures around the transaction in such a way that the loan becomes self-liquidity without the need for physical collateral.”
Executive Secretary of NCDMB, Felix Omatsola Ogbe, who spoke through Dr. Osa Uchendu, said the forum was an opportunity to deliberate with the stakeholders in the oil and gas industry.
He said: “Today’s gathering goes beyond being a sensitisation programme. It is an open conversation between us as stakeholders. It provides us an opportunity to listen, to present and address critical issues and present better clarity on the interventions and benefits of the Nigerian Content Intervention Fund.
“Over the years, the Nigerian Content Development and Monitoring Board has remained steadfast in promoting and ensuring that the Nigerian oil and gas intervention funds are taken good care of.
“However, we understand that for compliance to be truly ready, it must be practical and mutually beneficial to all participants in the industry. In line with this, we are introducing the Nigerian Content Fund Clearance Certificate (NCFCC), a verifiable and transparent instrument that serves as tangible prove of compliance by relating companies.
“This innovation reinforces our shared commitment to accountability and trust in the implementation of local content across the oil and gas value chain. Beyond compliance, we also recognize the pivotal role of financing in different local contents.”
Also speaking, the Group Head Oil and Gas, in the Bank of Industry, Gabriel Yemidale, said the Nigerian Content Intervention Fund (NCI Fund) which started in 2017, with N200 million had grown to N300 million in 2023.
“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 emphasize on this, that you have to be a contributor to this fund, you have to pay that one percent NCD which the take from your contract, that you have 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.
“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 utilize.”
