Business

CBN releases N50 billion to resuscitate textile industry

By Foster Obi

Central  Bank  of  Nigeria (CBN) has released  a N50  billion special  mechanism  for  restructuring of  existing facilities  and  provision  of  further  facilities in a  bid  to resuscitate  the  Textiles  Industry

CBN said on its website Tuesday that this  was  the  result  of  the  meetings held between  the Governor  and  owners  of  textile  mills  in  Nigeria  on August  7,  and September 29, 2015. Among the resolutions reached were that the Textile Mills articulate the  status  of  their  BOI  CTG  Loans  stating  their outstanding  loan  balances, tenure,  interest  rate,  interest  payment  and the  assistance being  sought from CBN

From the guidelines, activities to be covered under the intervention shall include operations in the CTG value chain as follows: Cotton ginning (lint production), Spinning (yarn production)•Textile mills• Integrated garment factories (for military, para-military and schools and other uniformed institutions)

For eligibility to participate in  the scheme textile companies shall meet the following criteria : Any textile  company with  an existing  facility  in  the books  of BOI under  the  CTG  scheme(emphasis  will be  on  facilities  that  are  indicating  weakness  arising from  tenor,  structure  as  well  as  facing  cash flow difficulties)•Any    textile    company    with    existing    facilities    in Deposit Money Banks, DMBs/NIFIs.

Textile companies that are not participating under the SME/RRF Projects financed before June 2009 (inception of the BOI CTG Loan) shall not be eligible to participate.

On the modalities, this is a one-off intervention with a seed fund of N50 billion and will terminate by December 31st2025.. Financing amount is a maximum of N2billion for a single obligor in respect of new facilities and N1.0 billion for refinancing. The Fund shall be administered at an all-in rate of return of 4.5percent per annum payable on quarterly basis. The managing agent (BOI) shall receive 1.0% service charge from the return proceeds and remit 3.5% to CBN.

Facilities shall have a maximum tenor of 10years and or working capital facility of one year with provision for a maximum rollover of 3 years. The Intervention allows for a maximum moratorium of 2 years in the facility repayment schedule.

Pix: CBN Governor, Godwin Emefiele