Three federal government organisations, the Ministry of Finance Incorporated (MOFI), Nigerian Consumer Credit Corporation (Credicorp) and the Presidential Initiative on Compressed Natural Gas (PI-CNG) on Wednesday, struck a deal that will give Nigerians access to cheap loans to convert to gas-powered vehicles.
Parties to the Memorandum of Understanding (MoU) said in Abuja that the deal was in response to the growing financial strain on Nigerians due to high energy and transportation costs.
Tagged the: “Credit Access for Light and Mobility (CALM) Fund”, the promoters stated that it aims to provide affordable credit for Nigerians to obtain CNG conversion kits and other energy-saving solutions, making essential services more accessible to Nigerians while promoting sustainability.
Speaking at the event, the Chief Executive Officer of MOFI, Dr Armstrong Takang, stated that over the last several months, most Nigerians, had experienced the high and unintended consequence of petrol subsidy removal
“Let me be very clear. These reforms are necessary. But they come with unintended consequences. And we have a collective responsibility to work together to find solutions to deal with those unintended consequences.
“One of those unintended consequences is the fact that the cost of transportation has spiked over the last several months and is creating a lot of challenges for many families that are now finding it difficult to move around.
“And we must find alternative means to reduce that cost while people still go about their business and go to work. And the good news is that the federal government has a solution for that. We also recognise the fact that it is not possible for us to have to pay for everything upfront at all times, especially for items that are capital-intensive in nature.
“And that is why the federal government came up with the programme of consumer credits and the establishment of Credicorp,” Takang said in his openings remarks.
Stressing that CNG conversion and the upfront payment for solar equipment remain capital-intensive, he noted that this was creating a challenge in terms of affordability.
Also speaking, the Chief Executive of the PI-CNG office, Michael Oluwagbemi, stated that the issue of mobility, and the need for Nigerians to be able to enjoy cheaper, cleaner, safer, more reliable access to transportation, was something uppermost in the mind of President Bola Tinubu.
Oluwagbemi stated that this will give the beneficiaries access to conversion kits, and in the long run, encourage domestic manufacturing.
According to him, it will further drive up the adoption of compressed natural gas and alternative forms of energy for the Nigerian people to deliver at a lower cost of transportation to make this economy competitive.
Speaking on the safety of CNG, he said: “We continue to let people know that compressed natural gas is safer, more reliable than what you’re using right now. It’s eight times less explosive than petrol and eight times less explosive than diesel.
“…When you’re sitting in a petrol vehicle and you get into a serious accident, there’s nine in 10 times possibility that it will lead to an explosion. That’s not the case with CNG”, he pointed out.
In his intervention, Chief Executive of Credicorp, Uzoma Nwagba, explained that the government through the ongoing reforms was taking steps to stem some of the systemic issues or historical challenges that the Nigerian economy had suffered.
“But it doesn’t come without its own pains. What we see is that with Nigerians now having to pay higher costs for petrol and for energy, we have a unique opportunity here to bring succour to Nigerians. Credicorp is an initiative that Mr. President has been very passionate about.
“With Credicorps, our goal is essentially to enable people to have an advanced life, a better life, and enabling them to do it by accessing goods and services that they would normally have to save up until they are much older,” Nwagba stated.
Through flexible financing options, Nigerians will be able to obtain immediate credit to convert their vehicles to CNG and adopt solar energy solutions, reducing dependency on expensive fuels and lowering electricity bills.
As the economic landscape shifts with higher petrol prices and increasing living costs, the CALM Fund, is expected to provide a much-needed alternative and enable Nigerians to obtain loans through Participating Financial Institutions (PFIs), providing a pathway to sustainable energy without the financial burden of upfront costs.
While Mofi will aggregate and expand the consortium fund, collaborating with private and institutional investors to grow the initial N10 billion fund, Credicorp will act as fund manager, using its expertise in consumer credit.
It will manage loan disbursements and offer credit guarantees and will seed the CALM fund with N2.5 billion, ensuring Nigerians can access affordable financing through PFIs.
On the oil other hand, the PI-CNG will serve as a service provider, facilitating the conversion of vehicles to CNG through authorised centres and offering discounted conversion packages for consumers using CALM loans.
The promoters of the scheme encouraged Nigerians to explore the opportunity by applying for CALM Fund loans through participating financial institutions (www.credicorp.ng/apply).
Beneficiaries, the government said, will enjoy up to 15-20 per cent discount per annum on the interest rates than the financial institutions currently serving people.
Emmanuel Addeh
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