BoI to Drive Import Substitution with Leather Products Financing Scheme

The Bank of Industry (BoI) has unveiled the Aba finished leather goods cluster financing programme targeted at over 150,000 artisans in the cluster.

This initiative is aimed at improving capacity of operators in the leather products manufacturing sector and intensify import substitution.

According to the bank, the financing programme will see beneficiaries accessing up to N300,000 for the procurement of materials for expansion and to improve production.

Speaking at the unveiling of the financing initiative in Aba, the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, said the launch of the programme has essentially addressed some of the challenges of MSME financing.

Enelamah, who was represented by the Ministry’s Permanent Secretary, Edet Akpan, said the Aba leather cluster has been in existence for many years with trade passed on from one generation to the other and can be considered to be one of the oldest and most successful trade clusters in the history of this great country.

“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 six million with the products sold in local as well as neighbouring West African market. Machines have also been acquired to enhance capacity both in quality and quantity”, he added.

He therefore urged beneficiaries of the financing scheme to ensure that loans are repaid to drive sustainability of the financing programme.

Managing Director of BoI, Olukayode Pitan, noted that the financing programme was designed to provide a tailored bundle of financial and nonfinancial services including capacity building to qualified members of the Leather Products Manufacturing Association of Abia State (LEPMAAS).

He explained that finished leather products to which LEPMAAS is a significant contributor, accounts 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 N10 billion despite the competing volumes of similar goods being imported.

“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 alongside Ford Foundation and Fidelity Bank Plc. The Foundation will be providing a grant that specifically focuses on strengthening the capacities of the leaders and beneficiaries even as monitoring structures to ensure loan repayments are instituted.

Fidelity Bank will provide account management services to the loan beneficiaries.

Ford Foundation Regional Director, 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.

Managing Director/Chief Executive Officer of Fidelity Bank , Nnamdi Okonkwo, said the partnership with BoI on the scheme is in furtherance of the bank’s commitment towards building the next generation of global entrepreneurs in the art of leather products manufacturing in the cluster.