By Tony Obiechina, Abuja
The Minister of State for Mines and Steel Development, Dr. Uchechukwu Ogah said on Tuesday that the disbursement of the N5 billion intervention loan for miners was slow because of the investors inability to meet the requirements set for accessing the loan.
According to him, some of the first set of applicants for the loan presented fake licenses and this created problems as the licenses did not meet mining cadastral requirements.
Speaking at a stakeholder engagement for operators captured under Artisanal and Small-scale Mining (ASM) in Abuja, Ogah said that the Buhari administration was determined to address the protracted challenge of inadequate funding, which has crippled artisanal miners who make up 90% of the sector.
He said Nigeria is blessed with abundant mineral resources that need to be urgently harnessed, especially as dwindling crude oil receipts can no longer buoy the country’s economy.
Ogah, advised the local miners desirous of a slice of the N5 billion Mining Fund to have all valid licenses and other vital documents before approaching the Bank of Industry (BOI), if they do not want their applications voided on receipt.
The Minister explained that the disbursement of the N5 billion intervention fund, which comes with a five percent interest, has been slow because a lot of miners approached the BOI with fake licenses and other forged documents, thus making their requests invalid.
He reminded the credit seekers that the money was a loan and not a grant, urging them to put it into judicious use.
The Minister said: “This stakeholders engagement remains a strategic intervention which seeks to expand and grow the economy using solid minerals.
“The mineral sector is one of the drivers of the economy. Oil and gas no longer paying the bills. The future of Nigeria is in our hands. We need to tell the FG that can bouy the economy.
“ASM are challenged by paucity of funds and they constitute 90% of the miners. So, N5billion has been set aside to energize the sector. Efficient use of the money is key and more will come. Disbursement has been slow because of the beneficiaries’ inability to meet up the conditions precedent. Those who wanted to benefit caused the problem. People printed fake mining licenses not issued by the cadastral office.
“Again, banks did their due diligence and discovered all these anomalies because they’re the risk bearers. The banks are willing to partner with artisanal miners using the ASM sector but we must be transparent.
“Banks want commitment, character, integrity. There is no risk can’t be mitigated by banks but there are conditions like cadastral license, mining license and many other documents some miners don’t have it and that’s how the issue of additional collateral came about.
“Banks want the beneficiaries to get the loan, work with it and the repay for others to enjoy it. The mining fund is a loan, not a grant. Banks are still giving 26% loans due to the high risk associated with the miners’ inability to have the requisite documents”.
In her remarks, the representative of BOI, Mrs. Olayinka Mubarak revealed that the bank’s initial interaction with the first set of loan seekers was not a pleasant one.
“There were many loose ends and we need to tidy that up. The money is not a grant but a loan with a 5% interest. If miners don’t repay the loans, it becomes a problem because BOI pays back the loan to the government. So, we must tidy the loose ends and get the documentation issue right.
“When we disburse, we share information with other banks on those with integrity. It makes you credit worthy. When you pay back, you can get a bigger loan. We’re helping the youth become gainfully employed. You can come to us and we can work things out. We can share your challenges and if there’s a need to restructure the loans, we will do that”, she stated.
A miner John Odeyemi, urged the government and BOI to relax some of the tough rules placed before loan seekers, in order to widen the number of beneficiaries of the loan.
To boost the capacity of artisanal and small-scale miners to participate in the development of the solid minerals sector, the Federal Government in 2017 launched N5 billion Nigerian Artisanal and Small-Scale Miners, Financing Support Fund to grant loans at single digit interest rates.
The Fund, which is operated by the Federal Ministry of Mines and Steel Development in collaboration with the Bank of Industry, would be available for only certified artisanal small-scale miners, constituting more than 80 per cent of the operators in the industry.
Under the terms of the memorandum of understanding signed, the government would contribute N2.5 billion of the Fund, which would be matched by another N2.5 billion by BOI. Qualified artisanal miners would be allowed to access between N100,000 and N10 million, while small-scale miner could get between N10 million and N100 million.
