BoI approves NAFDAC number for lending to SMEs

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Source: Vanguard

Bank of Industry, BoI, has beckoned Small and Medium Enterprises (SMEs) operators whose products have met quality certification by National Agency for Food, Drug Administration and Control, NAFDAC, to come for loan to expand their operations and create employments.

Recall that four years ago, specifically in 2014, BoI earmarked over N300 billion loan facility for viable firms in the over 17 million SMEs in the country. Also, recall that in its effort to develop the sector, the bank is working with Business Development Service Providers across the country to ensure that SMEs have bankable business proposals. In addition, the bank recently disbursed over N3 billion to 14 microfinance banks for on- lending to companies in this sector.

Again, to further capture more cottage firms for funding, last week; it signed a memorandum of understanding with NAFDAC to fast-track lending to companies whose products have met quality certifications. Quality certifications Speaking during the MoU signing ceremony in Lagos, Waheed Olagunju, Acting Managing Director BoI, said: “For us it is very important for our customers to be accredited by NAFDAC. Those who produce food must receive NAFDAC certification and endorsement before they can access credit and the importance of this is that if you do not have NAFDAC numbers, you cannot sell your products in the open market and a situation here you cannot sell. Your business model will become defective while your business plan will not materialize and unless we are able to establish that you can sell your products when they are produced, we will not lend to you, because it is only when you sell that the cash flow projections on which loan repayment is predicated is when the cash flow projected can be realised.”

“In 2016, we granted loans to more than 800 companies. In 2017, we plan to do more than a thousand because that is one of the fastest ways of ensuring quick recovery of the Nigerian economy and we are concentrating on brown fields, because new projects take about 18 to 24 months to implement before they start feeling the impact of such companies by way of job creation and other multiplier effects.

Focusing on ailing firms But we are focusing on ailing firms because their turnaround times are usually shorter and as such, they can begin to employ quicker than green field projects. “We believe that there are standards to be met in the area of food, drugs and other related products. We believe that standards have been set by some international agreements and protocols. NAFDAC is the statutory custodian of these requirements that have to be met by entrepreneurs who want to engage in these areas,” he said. He said part of the MOU, will give the bank access to NAFDAC’s database to work with companies that have been accredited by NAFDAC.

In her response, the Acting Director General, NAFDAC, Mrs. Yetunde Oni lauded the bank for the initiative, saying: “The partnership would entrench the policy thrust of the government of the on development of the non-oil sector of the economy. She said that while BoI is processing the machinery and equipment needs of the regulated industry and at the same time rendering technical support to NAFDAC, NAFDAC is rendering to such industry business support and furnishing BoI with information necessary for decision-making toward economic development.”

 

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