The Bank of Industry (BoI) says the five billion naira Nigerian Artisanal and Small Scale Miners (ASM) finance support fund is not `a national cake’ to be shared.
The Managing Director of BoI, Mr Olukayode Pitan, gave the charge to potential beneficiaries of the fund on Tuesday in Abuja on the side line of the loan signing ceremony between the bank and the Federal Ministry of Mines and Steel Development.
Pitan said potential borrowers should rather understand that the money “is a loan and that a loan once obtained should be paid back so that others could access it.’’
He however described the five per cent interest on the loan as friendly, adding: “I do not know where you can borrow money at five per cent; people should know that this money is not a grant, it is not your part of the national cake”.
According to the agreement, the ministry would contribute N2.5billion as pilot support which would be matched by another N2.5 billion from the BoI.
Pitan said that the ministry insisted that the interest rate should not exceed five per cent.
He however said that in terms of the amount of money required in the mining sector, “the five billion naira was just a drop in the ocean.
“In fact, the large mining companies, one of them can take all the five billion naira and it will not be enough.
“This is why this fund is not meant for the large mining companies,’’ Pitan said.
According to him, it was the first time in the mining sector that such fund would be put together.
Pitan said that modality set in accessing the loan was that the ministry had to license each miner before he or she could become a beneficiary adding that BoI would analyze miners and pick only the projects that are bankable.
“What we hope to do in the mining industry is to ensure that we make some of them who are not bankable become bankable names, developed and have more capacity”, he said.
“The support fund will increase capacity in the sector and will generate more revenue.
“This is one of the ways we can increase the non-oil export revenue and it will get people employed”, he added.
According to him, applicants would pass the bank’s internal approval process before they could access the facility.
He added that the approval process would be amended to suit the sector under consideration.
He said that the payment period for the artisans was one year, while for the small scale miners; it would not exceed five years.
Earlier, Dr Kayode Fayemi, Minister of Mines and Steel Development said the justification for the focus on artisanal and small scale miners was that 80 per cent of miners were within that category.
Fayemi said the ministry secured N30 billion (approximately 100m dollars) in its efforts at addressing the challenge of insufficient funding and lack of access to capital faced by operators in the sector, adding that the loan was a component of the Natural Resources Development Fund from the Federal Government.
