Members of House of Representatives on Wednesday stressed the need for Bank of Industry (BoI) to relax the conditions attached to accessing various intervention funds by enterpreneurs across the country.
Specifically, the lawmakers urged Federal Government to review the loan repayment plan for the N140 billion start-up capital called Government Enterprising and Empowerment Programme (GEEP) which formed part of the N500 billion social intervention package of the Federal Government.
The resolution was sequel to the adoption of a motion under matters of urgent public importance sponsored by Adamu Chika (APC-Niger).
Some of the lawmakers who spoke in favour of the motion are: Yakubu Barde (PDP-Kaduna); Pally Iriase (APC-Edo) and Abass Tajudeen (APC-Kaduna).
According to the document obtained by BusinessDay, under its 2017-2019 disbursement target, Bank of Industry is expected to release about N1.150 trillion into the economy.
Breakdown of the document seen by BusinessDay shows that the sum of N250 billion is to be disbursed in 2017; N400 billion is to be disbursed in 2018 while N500 billion is to be released in 2019.
According to Waheed Olagunju, BoI Acting Managing Director, the bank has also signed-on more commercial banks (N1 billion already signed with Ecobank) and Microfinance banks for on-lending to micro, small and medium enterprises. About N10 billion has been earmarked for this partnership in 2017.
According to the document, average lending rate for other BoI find will be maintained at 10 percent while cost of borrowing stands at three percent.
In his lead debate on the motion, Chika said that the stringent conditions attached to the programme negated the purpose of boosting Small and Medium Enterprises (SMEs) in the country.
Chika who stressed the need to review the conditions in order to make the programme accessible to beneficiaries to be identified by BoI including: market women, youths, artisans and farmers.
The lawmaker who faulted the repayment plan for the soft loans, argued that a condition that provides a grace period of six weeks for the beneficiary to commence weekly repayment of loan of between N10,000 and N100,000 for one year was too stringent.
“Although the programme is a welcome development, however the six months period within which to repay the loan, the grave period of two weeks and weekly repayment is not sufficient considering the fact that businesses require gestation period before they pick up as well as the harsh business environment in Nigeria.
“There is need for the Bank of Industry to take these factors into consideration and relax the terms a bit so that the programme will achieve its purpose of lending the much needed help to Nigerians as well as the multiplier effect which this programme will bring to he Nigerian economy in the long run since most economies of the world develop through a vibrant Small and Medium Scale Enterprises sector,” Chika said.
The House also urged the bank to increase the loan term to one year with two months as moratorium period and reschedule the repayment to monthly.
Speaker Yakubu Dogara explained that the scheme was aimed at stimulating enterpreneurship.
While ruling, Dogara mandated the joint committee on Industry and Poverty Alleviation to interface with the BoI Acting Managing Director on the inability of indigent Nigerians to access soft loans.