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Interested Nigerian fashion designers at the micro, small and medium scale level in search of funds for growth and expansion can now access them as the Bank of Industry (BoI) announces a N1 billion fashion fund.
Last week, the BoI announced a N1 billion credit facilities for fashion entrepreneurs involved in but not limited to garments, women’s shoes, handbags and jewellery/accessories to be expanded in future. The objective of this fund is to improve financial literacy and industrial entrepreneurship development of Nigerian entrepreneurs.
The fund is one of the numerous funds released by the bank for boosting businesses operating in the fashion industry. Other funds introduced over the years include – Nollywood fund, Cottage Agro Processing fund and Graduate Entrepreneurship fund. This fund is to address the major challenge faced by fashion entrepreneurs, which is the inaccessibility of credit facilities.
According to an online report of an interview with a Fashion promoter and cultural ambassador, “Fashion industry in Lagos is no longer a mere hobby. It has grown from being a handiwork of interest into a feasible and viable economic industry that could contribute enormously to the nation’s GDP if properly developed and channelled. Most of the designs that made waves in years past were from the creativity and genuineness of the young fashion designers.”
When our analyst tried to reach the bank of industry on how previous loans have been subscribed to and if interested parties have been able to meet up with the requirements for this loan, the bank failed to give a response.
However, Oreva, founder of Eva Green Wardrobe, appears excited about the opportunity and is looking forward to taking advantage of this fund. According to Oreva, she hopes to meet up with the criteria as this opportunity could pave way for her.
In terms of criteria needed to access the fund, BoI says retailers would be expected to have at least one outlet where products could be displayed, while the wholesalers must have contacts with retail shops with wide scopes around the nation. Also, distributors being the middlemen who will buy goods from the funds would have been developed in their own business.
The maximum amount that can be given to a person is N30 million, of which the bank would make provision of 75 percent and the interested parties to contribute 25 percent of the fund equity. Furthermore, they are also required to pay 1 percent appraisal fee, 1 percent commitment fee, 0.125 percent monitoring fee (paid quarterly), and a 9 percent interest rate per annum, payable at the end of every month.
The maximum tenure of the loan is five years, and it is payable from a maximum period of 12 months from the date of loan disbursement. Other conditions listed are: Security arrangement, Lien on stock of trade and items of equipment.
The interested party is also to deposit 5 percent of the loan amount in an interest yielding joint account, opened by the company with a designated bank and with BoI as a sole signatory, notarised statement of net worth of two guarantors, and strong and reliable monthly net cash flows that can support monthly loan repayment at ratio 3 to 1
