The Bank of Industry and the Ministry of Mines and Steel Development on Tuesday sealed a N5bn financing pact under the Artisanal and Small-Scale Miners Financing Support Fund for the development of the mining sector.
The amount, to be disbursed to artisanal and small scale miners at a single digit interest rate of five per cent with a repayment period of between one to five years is aimed at addressing the funding challenges in the sector.
Present at the event were the Minister of Mines and Steel Development, Dr Kayode Fayemi, the Managing Director, Bank of Industry, Mr Olukayode Pitan as well as other top government officials.
Pitan described the agreement as a move that would catalyse the growth and development of the sector to enable it meet the objectives of government in the area of job creation, poverty reduction and increase revenue for the nation.
He said that under the agreement, both the ministry and the Bank of Industry would provide the N5bn under a matching fund arrangement of N2.5bn each.
Giving further insights into the modalities for the disbursement, Pitan said each artisan miner would be entitled to a loan of between N100, 000 and N10m while small scale miners are to get between N10m and N100m.
He said, “This is the first time this kind of funding is being put together. The mining sector, in terms of financing is a specialised area that not every bank is equipped to lend to the sector.
“We are pioneering, assisting the artisans and small scale miners who are in the majority in this industry. Before they can access this money they must have the required licenses from the ministry.
“We are also going to look at the loans from a business point of view, we are going to analyse it and the ones that are bankable are the ones we will do. We will ensure that they come into cooperatives so that the money is not wasted.
Fayemi in his address described the N5bn loan as a demonstration of the commitment of government to diversify the economy away from oil to non-oil sector.
The minister said the fund would be available in the form of term loans for working capital to be utilized for the purchase of plant and machinery; payment for drilling, geological and other services related to mining business.
Other purposes for which the fund could be used are working capital for purchase of materials as well as other expenses.