ADIRE KAMPALA AND ASO OKE

BACKGROUND ·         Adire (Tie & Dye) and Aso-Oke fall under the textile industry which for many years was reputed as the largest single non-government employer of labor and second only to the food and beverages sector in terms of capital investment, output and contribution to Gross National Product (GNP).  The industry accounted for a good percentage of the country’s manufacturing value added and had made considerable progress in backward integration.

·         While Adire is the indigo dyed cloth made in south western Nigeria by Yoruba women, Aso-Oke is a hand loomed cloth woven in Nigeria. Aso-Oke means top cloth in the English language. Usually woven by men, the fabric is used to make men’s gowns, called agbada, women’s wrappers, called iro, and men’s hats, called fila.

·         Adire is produced in the South Western Nigeria and some States in the Northern part of the country, while Aso Oke is produced in the South West, Akwete town near Port Harcourt, Nupe speaking parts of Niger State, Tiv and speaking parts of Benue State. Therefore the product cuts across different geopolitical zones in the country

RATIONALE a.   The need to promote and sustain the production of indigenous textiles that are unique to Nigeria and can be showcased in any part of the world.

b.   This will be a major source of job creation especially in the areas where they are produced. For instance, some Adire makers employ fine artists that specialize in making patterns on prints, and fashion designers who specialize in creating new fashion styles with the fabrics.

c.    The need to modernize the production processes for Adire and Aso-Oke in order to improve their quality and make them globally competitive.

d.   The product program will facilitate access to finance for practitioners in the production of Adire and Aso-Oke to enable them acquire modern equipment for the enhancement of their efficiency.

TARGET MARKET/ CRITERIA The Fund will be accessed by indigenous players in the Adire/Kampala and Aso-Oke production business such as Small and Medium Enterprises (SMEs) – Limited Liability Companies and Enterprises – that are interested in the Adire and Aso-Oke businesses.
PROJECTED IMPACT Each of the category of the following is expected to create 14 – 23 jobs:

 

Small Medium
Direct 4 8
Indirect 10 15
Total 14 23
SINGLE OBLIGOR LIMIT  

Up to N10 million.

                            PRICING Interest Rate: 9% per annum.

Fees: 1% Processing fee.

TENOR Up to 4 years.
MORATORIUM 6 – 9 months from date of Loan Disbursement.
 

 

SECURITY

 

Loan Amount (N’m) Security Arrangement
5.0 – 10.0 1.    Specific charge over the equipment financed.

2.    Irrevocable Personal Guarantee of the Chief Promoter of the company.

3.    Two (2) external guarantors acceptable to BOI who must belong to any of the following categories:

a)   Senior Civil Servant (Level 12 and above) who should not be more than 53 years old or not more than 28 years in service (whichever comes first.

b)   Bankers (not below the level of Assistant Manager) and must have been confirmed by current employer.

c)   Professionals i.e. Medical Doctors, Lawyers, Accountants, Engineers, etc.

d)   Senior Staff (not less than a manager) of reputable quoted Companies, International Oil Companies, Telecommunications Companies (GSM providers)

e)   The guarantees must be supported with Notarized Statement of Net worth acceptable to BOI.

FUNDING STRUCTURE ·         Loan: 90% maximum from BOI (including working capital from              BOI or the SME-friendly banks).

·         Contribution by the promoter: 10% (minimum).

FUNDING SOURCES ·         BOI Fund and CBN N220 billion Micro, Small and Medium Enterprise Development Fund (MSMEDF)
 

DISBURSEMENT

Term Loan:

To be disbursed in phases in accordance with agreed milestones. Payment to equipment suppliers shall be on delivery, installation and successful test-run. Where any supplier requires advance payment for equipment fabrication, it shall be backed by a performance bond issued by a commercial bank or a BOI accredited insurance company, on behalf of the BOI accredited equipment supplier.

Working Capital:

To be disbursed after successful installation and testing of the equipment.

 

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