The Nigerian Maritime Administration and Safety Agency (NIMASA) has successfully negotiated a single-digit interest rate for beneficiaries of the Cabotage Vessels Financing Funds (CVFF) loan.
Despite initial resistance from the 12 Primary Lending Institutions (PLIs) to offer their 35% equity contribution at a single-digit interest rate, NIMASA’s leadership has agreed to dilute the higher interest rates by contributing 50% equity.
Key Highlights:
Single-Digit Interest Rate*: NIMASA’s 50% equity contribution will bring the interest rate down to below 10%, despite PLIs’ insistence on higher rates.
Eight-Year Tenor*: Beneficiaries have up to eight years to repay the loan, with the option to negotiate a shorter tenor with their banks.
Negotiation Process*: Beneficiaries can approach any of the 12 approved PLIs to negotiate a favorable rate, which will be diluted by NIMASA to a single-digit interest rate.
Quotes:
Financial Consultant*: “When you add the cost of funding from the PLIs and the cost of funding from NIMASA, we expect that it would not exceed the single-digit interest rate.”
NIMASA’s Role*: “NIMASA will ensure that whatever interest rate your bank is giving you, when diluted by NIMASA’s 50% contribution, will be an agreeable rate that will not exceed the single-digit interest rate.”
Implications:
The successful negotiation of a single-digit interest rate is expected to benefit beneficiaries of the CVFF loan, enabling them to access funds at a more affordable rate and boost the Nigerian maritime sector .
