Ministry of Finance Incorporated (MOFI), the Presidential Initiative on CNG (PI-CNG Ltd) and the Nigerian Consumer Credit Corporation (CREDICORP) have signed partnership to launch the N10 billion Credit Access for Light and Mobility (CALM) Fund in response to the growing financial strain on Nigerians due to high energy and transportation costs.
The partnership ceremony, which was held at the MOFI conference room in Abuja on Wednesday will allow Nigerians to have access to credit for CNG conversions and solar energy. Nigerian Tribune reports that the fund aims to provide affordable credit for Nigerians to obtain CNG conversion kits and other energy-saving solutions thereby making essential services more accessible to Nigerians while promoting sustainability.
Speaking during the event, the Managing Director, MOFI, Dr Armstrong Takang, said the program is providing an avenue for Nigerians to access credit for transportation and light by developing homegrown solutions for Nigerians by Nigerians while adding that the high cost of transportation due to removal of subsidy on fuel and its attendant results necessitated the establishment of the Fund to bring succour to Nigerians.
“Over the last several months, one of the things that most Nigerians, including all of us here, have experienced is the high cost of transportation due to the reforms taking away fuel subsidies. It’s one of the unintended consequences of the reform that is absolutely necessary if we’re going to build a robust economy.
“Let’s 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 who 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 through the Nigerian Consumer Credit Corporation or Credit Corp. The government has provided an opportunity to have access to credit to afford items such as that. We also have major challenges with the increase in electricity at our homes.
“We need to develop homegrown solutions for Nigerians, by Nigerians, in Nigerians. And that’s what it is about. We are here to launch a program that will give Nigerians access to credit for both transportation as well as light,” Dr Takang said.
The chief executive officer CEO, Pi-CNG, Michael Oluwagbemi, said the initiative is all about issue of mobility for Nigerians as well as promoting competition in the transportation sector and also to encourage domestic manufacturing of conversion kits thus providing an avenue for job creation.
“I can imagine that additional 500,000 to a million additional vehicles will be converted because of this program. If you recall, even though 1 million to 1.5 million vehicles constitute the commercial vehicle sector and move 90% of Nigerians, the bulk of vehicles actually are in private hands. They just move less number of people.
“But I can assure you that this particular program will not just deliver consumer credits to Nigerians, but will also encourage these products to be made, and will drive job creation as well as lower energy for Nigerians. We fully expect that this will drive up the adoption of compressed natural gas and alternative forms of energy for Nigerians to deliver a lower cost of transportation to make this economy work.”
In his remarks, the Managing Director, Credit Corp, Uzoma Nwagba, said the goal of the project is essentially to enable people to have an advanced life, a better life that will enable them to access goods and services to enjoy better life.
“We are setting aside a fund that will allow Nigerians to specifically access credit to convert their current vehicles to CNG. The fund will enable Nigerians to obtain loans through Participating Financial Institutions (PFIs) providing a pathway to sustainable energy without the financial burden of upfront costs. The name of the fund is the CALM fund meaning Credit Access for Life and Mobility. And the idea is to CALM things down,” Nwagba said.
While the partnership will see MOFI aggregate and expand the consortium fund, collaborating with private and institutional investors to grow the initial ₦10 billion fund, Credit Corp will act as Fund Manager using its expertise in consumer credit to manage loan disbursements and offer credit guarantees and Pi-CNG will serve as a service provider facilitating the conversion of vehicles to CNG through authorised centers and offering discounted conversion packages for consumers using CALM loans.
The CALM Fund offers a lifeline to households and businesses seeking practical ways to manage their high transportation and energy costs. Through flexible financing options, Nigerians will be able to obtain immediate credit to convert their vehicles to Compressed Natural Gas (CNG) and adopt solar energy solutions thereby reducing dependency on expensive fuels and lowering electricity bills.
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