The Governing Council of the Nigerian Content Development and Monitoring Board (NCDMB) has approved the expansion of the Nigerian Content Intervention (NCI) Fund from $200 million to $350 million.
Julius Bokuro, Special Assistant on Media and Public Affairs to the Minister of State for Petroleum, Chief Timipre Sylva, who made this disclosure in a statement on Sunday, said increasing the fund by $150m was part of the decisions taken at the recent NCDMB governing council meeting.
According to him, the meeting, which was chaired by the minister, who is the Chairman of the NCDMB Council, also directed that $100m from the additional funds should be deployed to increase the five existing loan products of the NCI fund, covering manufacturing, asset acquisition, contract finance, loan refinancing and community contractor financing.
He explained that the council also approved $20m and $30m respectively to be deployed to two newly developed loan product types – the Intervention Fund for Women in Oil and Gas and PETAN Products, which include Working Capital loans and Capacity Building loans for PETAN member companies.
Bokuro recalled that the NCI fund was instituted in 2017 as a $200m fund managed by the Bank of Industry (BoI) engaged to facilitate on-lending to qualified stakeholders in the Nigerian oil and gas industry on five loan product types.
The fund is a portion of the Nigerian Content Development Fund (NCDF) aggregated from the one per cent deduction from the value of contracts executed in the upstream sector of the oil and gas industry.
The minister’s aide explained that about 94 per cent of the NCI fund had been disbursed to 27 beneficiaries as at May, 2020, even as NCDMB had received new applications from 100 companies for nearly triple the size of the original fund.
He said the guidelines for the NCI fund provided that beneficiaries of the manufacturing and asset acquisition loans could each access a maximum of $10m. Also, beneficiaries of contract finance loan can access $5m, while beneficiaries of the loan re-financing package can access $10m, with a beneficiary of the community contractor finance scheme getting a maximum of N20m.
The maximum tenure for all loan types is five years and applicants cannot have two different loans running simultaneously.
Daily Trust gathered that at the onset of the fund, the applicable interest rate for the various loan types was pegged at eight per cent, except the Community Contractor Finance Scheme, which is five per cent.