- BoI Unveils Finance Scheme for Leather Manufacturers
To improve capacity of operators in the leather products manufacturing sector and intensify import substitution, especially for those in Aba cluster, the Bank of Industry has unveiled the Aba Finished Leather Goods Cluster Financing programme targeted at over 150,000 artisans in the cluster.
According to the bank, the financing programme, which will see beneficiaries accessing up to N300, 000 for procurement of materials to expand and improve production, is expected to further boost import substitution.
Speaking at the unveiling of the financing initiative in Aba, the Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, said the launch of Aba finished goods cluster financing programme essentially addressed some of the challenges of Micro Small and Medium Enterprises financing.
Enelamah, who was represented by the Permanent Secretary in the ministry, Edet Akpan, was quoted as saying that the Aba leather cluster has been in existence for many years with the trade passed on from one generation to the other.
He said it could be considered to be one of the oldest and most successful trade clusters in the history of Nigeria.
“The cluster of over 30,000 artisans is structured along four specialised production groups for shoe making, belt making, trunk box and bag making.
“The annual production capacity of shoes alone is estimated at about N6m with the products sold in local as well as neighbouring West African markets. Machines have also been acquired to enhance capacity, both in quality and quantity,” Enelamah said.
He therefore urged beneficiaries of the financing scheme to ensure that loans were repaid to drive sustainability of the financing programme.
The Managing Director, BoI, Olukayode Pitan, noted that the financing programme was designed to provide a tailored bundle of financial and non-financial services, including capacity building for qualified members of the Leather Products Manufacturing Association of Abia State.
He explained that finished leather products to which LEPMAAS was a significant contributor, accounted for over 80 per cent of the textile apparel and footwear component of the manufacturing sector, while informal computations put yearly revenue from the cluster at over N10bn despite the competing volumes of similar goods being imported.
He said, “By providing low interest, non-collaterised loans, the bank has provided flexibility for qualified members of LEPMAAS, recommended by their line and zonal chairmen, to access up to N300,000 towards the procurement of materials to expand and improve their production activities.”
“The programme is being implemented in collaboration with Ford Foundation and Fidelity Bank Plc. The foundation will be providing a grant that specifically focuses on strengthening the capacities of the beneficiaries even as monitoring structures are put in place to ensure loan repayments. Fidelity Bank will provide account management services to the loan beneficiaries.
The Regional Director, Ford Foundation, Innocent Chukwuma, said the partnership with BoI was part of efforts to fulfil its commitment to leather manufacturers to encourage local production and increase campaign for adoption of made-in-Aba.
To this end, Chukwuma said the foundation would be staking a grant of $150,000 in the programme to drive social impact and enhance productivity.
The Managing Director and Chief Executive Officer, Fidelity Bank, Nnamdi Okonkwo, said the partnership with the BoI on the scheme was in furtherance of the bank’s commitment towards building the next generation of global entrepreneurs in the art of leather products manufacturing.