How MADE/ BoA partnership is aiding Aba finished leather industry
Inclusion of the finished leather sector in the Department of International Development (DFID) intervention programmes, has brought succour to shoe, belt and bag makers in Aba, writes GODFREY OFURUM
Access to finance has been the major challenge faced by micro, small and medium entrepreneurs in Nigeria, especially artisans, who are seen as high risk businesses by commercial banks.
The Aba finished leather industry-made up of micro and small manufacturers of shoes, bags and belts had battled with this challenge for some time without help.
Consequently, their inclusion in the Department of International Development (DFID) intervention programme, a British parliament sponsored project in Nigeria, has brought succor to the sector, which stakeholders argued has great potential to turn around the economic fortune of the country.
Before DFIDs Gems1 and currently MADE intervention programmes, the artisans had approached several commercial banks for loan, but none of the banks had a product that suited their needs.
And since the programme started in 2014, 30 cooperative societies, numbering about 300 people have benefited from the programme with each member receiving N250, 000.
Kerian Agbasiere, a member of Good News Multipurpose Cooperative Society; the first cooperative society to benefit from the scheme, affirmed that the loan facility has made a difference in his business.
According to him, it has helped my business to grow. From a production capacity of about 40 pairs a week, Agbasiere now produces 100 pairs a week.
He also explained that the loan interest rate is low, when compared to what commercial banks offered them, noting that they are comfortable with BoA loan condition.
He urged members of the cluster yet to benefit from the plan, to key into it, to boost their businesses.
“We are 30 members in my group and further divided into 3 groups of A to C, and all of us got N250, 000 each.
“Without MADE, I don’t think this would have been possible. Their intervention in the sector is good for our sector. What they are doing is making serious impact in the finished leather goods industry.
To ensure that beneficiaries pay back the loan, Okechukwu Williams, chairman, Leather Products Manufacturers Association of Abia State (LEPMAAS), the umbrella body of shoe, bag and belt makers in Abia, explained that the association has put measures in place to make sure that beneficiaries pay back the loan at the right time.
He affirmed that MADE’s intervention activities in LEPMAAS has impacted positively in the activities of the sector and reassured their commitment at sustaining the relationship.
Similar loans in the past were marred by irregular remittances and sometimes outright refusal of the beneficiaries to pay back, which was part of the constraint faced by the sector operators, from accessing loans.
And this was reiterated by Ngozi Nwanah, branch manager, Umuahia branch of BoA. According to her, the repayment of loans by the first batch of beneficiaries was “disheartening” and called for a change of attitude.
She said that many cooperative societies have become beneficiaries of the loan facility following in the footsteps of Good News Multipurpose Cooperative Society, which was the first beneficiary from LEPMAAS.
She urged women in the finished leather industry to form cooperative societies to enable them access bank loans to improve their income.
Bank of Agriculture (BoA) in the second phase of its loan facility to the Aba finished leather cluster, disbursed N10.4 million loan facility to seven cooperative societies, affiliated to the Leather Products Manufacturers Association of Abia State (LEPMAAS). Consequently, the bank has so far disbursed N65 million to 315 beneficiaries in the cluster.
The credit facility, which is repayable in 12 months with 2 months moratorium at 12 percent interest rate, is to assist the finished leather manufacturers to enhance their productivity, increase income and create jobs.
According to Babtunde Igun, executive director, Wholesale Finance, BoA, the loan is not a largesse, but a credit facility that must be repaid and at the appropriate time to enable others to also benefit.
Represented at the forum by Mike Owonuwa, zonal manager, South-East zone of the bank, Igun, urged the beneficiaries to utilise the funds well to improve their businesses, create jobs and contribute to the gross domestic product (GDP) of the country.
Abimbola Adeyinka, senior intervention manager, leather/access to finance, MADE, explained that the programme aims at increasing the incomes of 150,000 poor people in the Niger Delta region of Nigeria, through improvement in performance and inclusiveness of key market sectors; raising beneficiaries’ incomes by 40 to 50 percent, by September 2018, of which 50 percent will be women
The MADE programme according to Adeyinka, is a DFID supported project, aimed at promoting livelihoods in Nigeria through value chain promotion to increase economic growth, employment and incomes.
He revealed that the programme is targeted at the nine states in the Niger Delta region (Abia, Akwa Ibom, Bayela, Cross River, Delta, Edo, Imo, Ondo and Rivers states) and utilises the Making Markets Work for the Poor (M4P) approach to ensure that interventions are pro-poor and inclusive of vulnerable groups, working in close collaboration with the extractive industries to support community engagement.
MADE, which took over from the Growth and Employment in States (GEMS 1) project on meat and leather, also financed by DFID, is assisting the Aba finished leather industry to have access to market, increase their economic activity and trade as well as create jobs and raise incomes of the artisans.
GODFREY OFURUM